Rupert Murdoch’s Twenty-First Century Fox has bid $14 billion to buy the 61 pc of the British satellite television broadcaster Sky. It is thought that the Murdoch empire has used the value of the pound which currently stands at $1.26 to its advantage. The value is near 30 year lows as it slowly tries to recover after Britain voted to leave the European Union. This decision sent sterling in to a tailspin until it bottomed out at around $1.22. It also affected Sky’s share price, another key factor in the deal.
With owning Sky, Fox would have pay TV access to 22 million households in western Europe. Strategically these economies are seen as vital expansion for the American broadcaster.
Previously Rupert Murdoch tried to buy Sky through his ownership of News Corp, but this provoked much ire from the British political classes as it is thought with his control of some of the UK’s biggestnewspapers, his control over news media in the UK would be far too powerful. The attempted buyout was killed off in 2011 during the phone hacking scandal that embroiled the News Corp business. IndeedMr Murdoch had to reassess the business to the point of removing one of its most popular publications, “The news of the world”, though it was replaced by an alternative publication not long after.
As the Fox business and the News corp business are now exclusive of each other, competition rules are not going to be an issue, and it’s thought that the merger could happen quickly and seamlessly. Especially as James Murdoch (Rupert’s son) is now in charge of Sky. Many have expected this fresh bid since the failed bid in 2011, and the installation of the heir to the empire at the helm of Sky made the intention clear.
The Murdoch’s have been involved in the running of Sky since the 80’s when Rupert Murdoch pushed the loss making venture in to a winner with the introduction of pay TV sports. In the 90’s his son James pushed on that success turning the business in to one of the UK’s biggest companies and a dominant force in Europe with regards to television supremacy. But the broadcasters future is unclear, as it tries to head off heavy competition from the likes of Netflix and Amazon who seek to try and change the industry to better suit their business models.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.