Is Ru­pert Mur­doch ready to give up his me­dia mogul ti­tle?

The National - News - - BUSINESS - IVAN FAL­LON Ivan Fal­lon is a for­mer busi­ness edi­tor of The Sun­day Times

Ru­pert Mur­doch has spent his life ac­quir­ing things, build­ing up his 21st Cen­tury Fox/News Cor­po­ra­tion into the US$60 bil­lion busi­ness it is today through a stun­ning se­ries of ac­qui­si­tions, which of­ten stretched his busi­ness to the limit.

All his life, from the mo­ment he in­her­ited a cou­ple of small news­pa­pers in Ade­laide, he has taken huge risks, bet­ting the shop when he moved to the United Kingdom in the late 1960s with an out­ra­geous bid for the

News of the World. Then came Times news­pa­pers, fol­lowed by a move into the United States, where he bought 20th Cen­tury Fox and a chain of TV sta­tions be­fore launch­ing Fox TV, one of the most prof­itable – and in­flu­en­tial – TV chan­nels in the world today.

So the news in the past few days that he had been in ne­go­ti­a­tions – since bro­ken off – to sell Fox’s prime film and TV as­sets, in­clud­ing its 39 per cent stake in Sky, the pan-Euro­pean broad­caster, to Walt Dis­ney came as a shock to an in­dus­try which is al­ready go­ing through a deal frenzy as it bat­tles to de­fend it­self against the threat from the Sil­i­con Val­ley giants, as well as de­clin­ing au­di­ences for tra­di­tional me­dia.

The Fi­nan­cial Times called it “the most tu­mul­tuous week” in re­cent mem­ory but there is much more to come, with some huge deals hang­ing in the bal­ance.

No­body in the global me­dia world at­tracts more in­ter­est and anal­y­sis than Mr Mur­doch and the leak of his aborted – at least for the present – talks with Dis­ney has set off a new wave of spec­u­la­tion among the army of jour­nal­ists, writ­ers and politi­cos who have fol­lowed his ev­ery move for decades.

Why would he even con­sider break­ing up the em­pire he has put to­gether at such per­sonal risk over more than 60 years? Is he throw­ing in the towel and ac­knowl­edg­ing that, at 86, he can no longer com­pete in the world of mod­ern me­dia? Is tech­nol­ogy mov­ing too fast for an oc­to­ge­nar­ian, even with the help of much younger and tech-savvy chil­dren?

That is cer­tainly the im­pli­ca­tion as de­tails of the talks emerged. Fox’s movie and tele­vi­sion stu­dios and its ca­ble en­ter­tain­ment busi­ness, which in­cludes the Na­tional Ge­o­graphic and FX chan­nels, are worth an es­ti­mated $20bn be­tween them, and Dis­ney was also in­ter­ested in buy­ing Mr Mur­doch’s in­ter­na­tional busi­nesses, which in­clude Star TV, the Asian pay-TV busi­ness, and the stake in Sky which has a value of about $9bn.

That would ba­si­cally leave 21st Cen­tury with just its US sports chan­nels and the Fox News ser­vice, which are highly prof­itable and seen – pre­sum­ably by Mr Mur­doch – as less vul­ner­a­ble to the threats com­ing out of Sil­i­con Val­ley. But for how long?

He has been watch­ing those threats for a long time but his re­ac­tion in the past has al­ways been an ag­gres­sive one, such as his run on Time Warner three years ago, his most se­ri­ous at­tempt to “bulk up” and stay ahead of – or least in – the game.

The fail­ure of his talks with Dis­ney has sparked ru­mours that he might have an­other go, spoil­ing AT&T’s agreed $85.4bn deal which has al­ready run into trouble. The US reg­u­la­tor last week re­quired AT&T to sell off ei­ther its CNN news chan­nel, the scourge of Don­ald Trump, or DirecTV, its own satel­lite broad­caster; or the deal will not get ap­proval.

Ei­ther way, Mr Mur­doch has let his mask down and 21st Cen­tury Fox is now “in play”.

So is Dis­ney, which also ac­knowl­edged its own vul­ner­a­bil­ity to Net­flix, which it has been fight­ing tooth and nail. This is a real Hol­ly­wood ver­sus Sil­i­con Val­ley war with no holds barred. Dis­ney’s chief ex­ec­u­tive, Bob Iger, has al­ready fired the open­ing salvo by an­nounc­ing that as from Jan­uary 2019 Dis­ney’s cat­a­logue of hit movies, from

Is he throw­ing in the towel and ac­knowl­edg­ing that, at 86, he can no longer com­pete in the world of mod­ern me­dia?

The Jun­gle Book to the Toy Story fran­chise, will no longer be streamed on Net­flix.

That is a pretty se­ri­ous de­ci­sion: Dis­ney, Fox and the other big stu­dios have made bil­lions of dol­lars from rent­ing their shows to Net­flix and Ama­zon Prime. The fact that they are now cut­ting that source off shows how con­cerned they are at the huge sums the stream­ing ser­vices are pump­ing into mak­ing their own con­tent.

Net­flix alone has spent $130 mil­lion on mak­ing The

Crown se­ries and Ama­zon is said to have com­mit­ted twice that to its own se­ries, The

Grand Tour. Mil­lions of ca­ble sub­scribers are can­celling their sub­scrip­tions, Fox’s main in­come stream, forc­ing Dis­ney to splash out $2.5bn on its own stream­ing ser­vice Bam Tech and launch­ing some whizzy new apps.

But there is now talk that Dis­ney it­self may get a bid, pos­si­bly from Ap­ple, which is also look­ing to get into the sec­tor (and has an es­ti­mated $350bn sit­ting in cash in over­seas ac­counts), or Ama­zon, and the ca­ble gi­ant Com­cast is also said to be in­ter­ested.

Com­pared to these mon­sters, 21st Cen­tury Fox is a min­now.

Mr Mur­doch’s last deal may be his best: cash in his chips while they are still on the ta­ble.

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