Murdoch’s tough choices
Rupert Murdoch and sons James and Lachlan will breathe a sigh of relief that Britain’s Competition & Markets Authority (CMA) does not consider allegations of sexual harassment at Fox News in the uS as a threat to the integrity of British broadcasting.
Nevertheless, the normally toothless CMA does regard full ownership of Sky, with its impressive news operation, as a challenge to media plurality because of ownership of the Sun and the times in Britain. this looks tendentious since the Murdoch penetration of the uK news market is modest compared to the BBC and ItV. the ruling underestimates new driving forces in news, including social media and streaming.
the bigger City issue is what the ruling means for 21st Century Fox’s £11bn offer for the minority stake in Sky; and Disney’s bid for most of Fox’s assets, including Sky. One possibility, which would backfire on the CMA and telecoms regulator Ofcom, is that Murdoch decides Sky News is too much of a nuisance and closes it down.
What the regulators would prefer is to see Sky News hived off into an independent but related trust with a commitment to keep it running for more than five years. this would eventually mean new owners Disney swallowing tens of millions of pounds of losses.
there is a counter view that Sky News is a global marketing tool on the back of which sports and other rights can be sold.
the hedge funds on Sky’s register would like to see the news channel closed as soon as possible, seeing it as a block to quick profits. For decades Murdoch’s devotion to news has been unwavering, as seen in his preservation of the loss-making times. He will not throw Sky News to the dogs easily.
Fairburn folly
tHe implosion at Carillion has taken Britain’s fattest of fat cats, housebuilding boss Jeff Fairburn, out of the line of fire. At a moment when the reputation of capitalism is fragile, the award of shares worth around £130m to the persimmon boss shows dramatically that the safeguards put in place to protect investors from corporate excess are not working.
What makes the persimmon payouts outrageous is that the current financial strength of the builders is the result of a £7.5m-a-day government subsidy to house hunters through Help to Buy.
Assisting first-time buyers must be a good thing and the industry is striving to meet challenging targets.
But as the Homeowners Alliance points out, although it may support first-time buyers, the main beneficiaries are housebuilders. this would not matter if York-based persimmon and the housebuilders were good corporate citizens with a social conscience who sought to make profits so as to improve availability of social housing.
Instead of maximising the public good, the residential building giants invariably find ways of circumventing obligations for social housing and infrastructure.
they have also played havoc with the personal finances of customers by selling a proportion of homes on long leases with escalating ground rents sold to property funds – a practice that is now being banned.
they are slow to build on the brown field sites in and around many cities because of the environmental costs of clean-up which hit profit margins.
It is far easier for persimmon to bully communities to give up playing fields and orchards as at Yatton in Somerset where it is in dispute with the council leader.
Last week Larry Fink of fund managers Blackrock warned large companies that they most contribute to society and deliver to all stakeholders if they want to keep his company’s support.
What better place for Blackrock to start than persimmon, where it holds a 5.4pc stake, persuading Fairburn and colleagues that grotesque bonuses are not a private matter and offend societal norms.
Royal rise
NetFLIX soared after dazzling final quarter data for 2017 when it captured 6.36m international subscribers, lifting its global streaming base to 117.6m.
Market value has soared through the $100bn (£71bn) mark driven by shows such as the Crown, Stranger things and the movie Bright starring Will Smith.
It is piling funds into productions although it had to write-off £27.8m against halted work on House Of Cards following Kevin Spacey difficulties.
No wonder Disney, Comcast and other global media players are running scared.