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Rupert Murdoch loses BSkyB bid, may lose more

Stephen Beard Jul 13, 2011
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Rupert Murdoch loses BSkyB bid, may lose more

Stephen Beard Jul 13, 2011
HTML EMBED:
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Kai Ryssdal: Rupert Murdoch didn’t get to be a billionaire by walking away from a fight. But today the head of News Corp. did just that. He bowed to immense political pressure and abandoned one of the biggest deals of his career, a plan to buy full ownership of the U.K.’s biggest television network, BSkyB.

From London, Stephen Beard has more.


Stephen Beard: For 40 years, Murdoch ran rings around British politicians and regulators. With 40 percent of the British press, he was courted and feared. Today, that spell was finally broken. Murdoch dropped his bid for BSkyB.

Ed Miliband, leader of Britain’s Opposition Labour Party.

Ed Miliband: This is a victory for people up and down this country who have been appalled by the revelations about phone hacking, who have thought it is beyond belief that Mr. Murdoch could — when this criminal investigation is going on — expand his stake in the British media.

Murdoch was desperate to buy the 61 percent of BSkyB that he doesn’t already own. His newspaper revenues are declining. But the TV station is churning out cash. To get his hands on that profit, he needs full ownership of the company. Today’s decision is a bitter blow, but analyst Ivor Gaber thinks Murdoch may yet bounce back.

Ivor Gaber: Never underestimate Rupert Murdoch: he’s a brilliant businessman, resourceful, imaginative and he showed himself in the past to have the ability to outwit most.

But Murdoch could be ousted as CEO. News Corp.’s share price has fallen 20 percent due to this crisis. American shareholders are grumbling. Media analyst Roy Greenslade — himself a former tabloid editor — does not believe Murdoch will recover.

Roy Greenslade: He’s 80 years old. If he was a young, vigorous man, he might be able to get back on track. But I think he’s damaged goods, and it’s really difficult to believe that the damage can be undone.

Everything now depends on what happens in the U.S., where he has his most valuable assets. A Democratic senator has called for an inquiry into possible phone hacking in America, and whether News Corp. snooped on the families of the victims of 9/11.

In London, I’m Stephen Beard for Marketplace.

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