The old fox that never gives up
Rupert Murdoch never forgets, never gives up and is not in the least put off by the inevitable furore that will result from a renewed bid for Sky, writes Raymond Snoddy
In this most uncertain of worlds you could be absolutely certain that Rupert Murdoch would return one day to unfinished business: full ownership of Sky, the company he created.
Despite his advanced age, Murdoch has not been an old man in a hurry but someone happy to let enough time pass to get what he wants. Time enough to bring his son James back to chair the enlarged Sky and time also to rehabilitate Rebekah Brooks and bring her back as chief executive of News UK and perfect time now to make the bid that Murdoch will probably regard as the pinnacle of his career.
As the Guardian said with more than a touch of understatement: “The old fox may sniff a good time to enter the henhouse.”
It is a totally brilliant time for Murdoch to head for the henhouse and the hens have predictably scattered in all directions. Before the move the Sky share price was agreeably low and the pound weak against the dollar because of Brexit. The starting premium of 40 per cent came off a splendidly low base for Murdoch.
Before any rational discourse is possible on whether the Murdoch bid is a good thing or merely a neutral matter to be left to the markets to decide, a lot of history, baggage, undergrowth and Myths – as in M for Murdoch – have to be cleared away.
Could Murdoch have really been playing a long game by mandating The Sun’s virulent pro-Brexit campaign in the certain knowledge that the value of the pound would tank as a result therefore helping a deal? The Times was for Remain but then The Times readers didn’t have as many votes as Sun readers.
This is probably too elaborate a conspiracy theory. The Sun has always been anti-EU even though its readers will be in the front line to suffer most from rising prices and lower growth rates that Brexit will bring.
Murdoch was not alone on Brexit the Daily Mail and the Daily Express were if anything more enthusiastic for leaving the EU. But not for the first time the Murdochs aligned themselves with the stance of The Sun.
A deal has already been done with Theresa May at the private meeting with Murdoch in New York in September.
Unlikely that anything as blatant took place, although the Prime Minister may have been sounded out to ensure she has no abiding animus against a Sky deal of the sort that former Business Secretary Vince Cable once so eloquently expressed in his threat “to declare war on Murdoch.”
That “myth” can ever only be put to rest if Mrs May reveals what was actually said at what could have been a very relevant meeting.
Curiously, since the original bid was withdrawn in 2010 in the wake of the phone-hacking scandal the issues involved are both the same and at the same time very different.
There are the same issues of whether the Murdochs are “fit and proper” people to run such a media company – arguments immediately rejoined by Sir Michael Lyons, former chairman of the BBC Trust and MPs of most parties.
There are the same issues of scale, media plurality and worries about the editorial independence of Sky News.
Despite attempts to tar Sky News with the Fox brush there is no evidence that Murdoch has tried, before 2010 or after, to impose his editorial prejudices on the news channel, either directly or in the usual manner by appointing a flunky editor who agrees with his point of view.
The reality has always been that with a 39 per cent stake in the company and the rest of the stock split between instructional shareholders more interested in the share price and the bottom line than anything else, Rupert Murdoch effectively controlled BSkyB just as he now controls Sky with its television interests that cover five countries – the UK, Germany, Italy, Austria and Ireland.
It was for that reason that last time round many media commentators concluded that with appropriate editorial safeguards to protect the editorial independence of Sky News there was no obvious pressing reason to block the deal. BSkyB had not been involved in phone hacking and there was no evidence of involvement by proxy.
Murdoch would have more firepower, but in a consolidating media world it was more likely than not that such a deal was inevitable.
The split between Murdoch’s television and newspaper interests changes little other than helping to ensure the newspapers were not entirely cut adrift and sold under pressure from Murdoch’s US shareholders.
Despite the similarities with six years ago, the fundamentals of international media and communications have changed dramatically and wherever you look competition has intensified.
In the UK, BT has emerged as a formidable rival in the television space and is very capable of out-bidding Sky for the all-important Premier League rights while Liberty Global, owner of Virgin, continues its European expansion. Netflix is extending its reach around the world and Amazon, Google and Facebook have the financial firepower to do almost anything they choose.
In the case of threats to plurality in the newspaper market the recent referendum campaign and the pro-Brexit imbalance is troubling. It is not an exaggeration to say that it was the right wing popular press which delivered Brexit.
But the real threat to newspaper plurality is not Murdoch but the danger of eventual extinction.
Print brings in the lion’s share of the revenue compared with online and print sales which continue to decline. Murdoch, who loves newspapers is, in this context, more part of the solution than the problem.
Apart from structural and technological change the main threat to newspapers and plurality comes from Google and Facebook hoovering up ads on an industrial scale without providing original, verifiable journalism of their own.
Once the myths and the prejudices have been stripped away – and of course Rupert Murdoch has done many things to create a host of perfect reasonable prejudices – the conclusions are clear. City investors knew precisely what they were getting into by investing in a Murdoch controlled company and they can be left to protect themselves from getting bilked on a £10.75 billion deal.
There are serious issues to be considered and Culture Secretary Karen Bradley should refer the formal bid when it arrives to Ofcom for rigorous examination if only to avoid accusation of a sweetheart deal conducted in private in New York. The creation of a strong independent editorial board for Sky News would also be a sensible precaution for the future – just in case.
After that it wouldn’t take a genius to work out that the old fox will finally be in control of the henhouse by the summer creating new value for Sky and those minority shareholders who manage to hang on.