Murdoch's $14B Plan For European Dominance Through BSkyB

May 13 2014, 4:41pm CDT | by

Perpetually in motion, octogenarian billionaire Rupert Murdoch is shaking up the chess pieces in an attempt to consolidate his pay-TV empire in Europe.  Through BSkyB, Britain’s largest pay-TV company, Murdoch is mulling a potential $14 billion merger of his assets in Italy and Germany that will give him approximately 20 million subscribers along with the rights to three of the world’s most important soccer leagues.  The move could set the stage for a billionaire showdown with John Malone, who’s Liberty Global has about 25 million customers across 12 countries in Europe.

In a press release, “preliminary discussions” were officially announced between BSkyB and 21st Century Fox, two companies controlled by the Murdoch family, regarding Sky Italia and Sky Deutschland.  The idea would be to acquire Fox’s controlling 57% stake in Germany, along with a full buyout offer to minority shareholders, and the totality of Sky Italia, which is fully under Fox’s control.  “BSkyB believes at the right value, this combination would have the potential to create a world-class multinational pay TV group,” the company said.

This would allow Murdoch to group its 10.5 million subscribers in Britain and Ireland with 3.7 million in Germany and Austria, and 4.8 million in Italy, in a deal valued at €10 billion by Reuters.  In Britain, BSkyB counts with a dominant position, with 57% of the market, which would be complemented with a 24% share in Italy and 19% in Germany.  The UK would contribute more than two-thirds of revenues and nearly 90% of operating profit.

Not only will Murdoch be fusing his European pay-TV assets, he will also be concentrating one of the largest portfolios of top-notch soccer leagues in the world.  With the value of TV rights for sports going through the roof, several major European leagues have recently negotiated juicy contracts.  The English Premier League signed a three season deal worth $2.6 billion per season, with BSkyB and BT paying more than $5 billion to secure the domestic rights.  In Germany, the Bundesliga inked a deal with Murdoch’s Fox for five years said to take domestic revenues to $907 million and nearly doubling international revenue to $150 million per season.

Despite a decline in on-pitch performance, the Italian league continues to be one of the most lucrative out there, with a $1.3 billion deal set to expire in 2015, as Bobby McMahon explained in Forbes’ soccer valuations package.  The Serie A, as the Italian league is called, recently moved to a centralized selling model, and negotiations for a new three year deal should kick off soon.

Murdoch’s attempt to fuse his pay-TV holdings would represent a challenge to Liberty Global, which counts with 25 million subscribers as of the end of the first quarter.  Malone’s Liberty is present in 12 countries across Europe including the UK, Ireland, Austria, and the Netherlands.  The company spent almost $50 billion in M&A in Europe over the past few years, including $6.8 billion for Dutch cable company Ziggo, according to Bloomberg.

Still, Murdoch is playing his cards close to his vest.  On Monday, 21st Century Fox released a two-line press release that acknowledged “internal discussions” that have “from time to time […] included BSkyB.”  Fusing his cable companies would allow him to streamline operations and leverage with the power of its increased subscriber base.  With three of the major five soccer leagues in his portfolio, Murdoch can mount a strong challenge for Malone.
/>

Countries With The Richest Soccer League TV Deals

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Self-regulation skills prepare children for school
Washington, Nov 23 (IANS) Efforts to utilise music and games to help pre-schoolers learn self-regulation skills could help prepare at-risk children for kindergarten education, a new study says.
 
 
Anti-HIV drugs can affect unborn babies' hearts
Washington, Nov 23 (IANS) The drugs given to HIV-positive pregnant women can cause significant long-term heart problems for the non-HIV-infected babies they carry, says a new study.
 
 
Sound training helps brain keep distractions at bay
New York, Nov 23 (IANS) The ability to sustain focus on a goal goes down with age but researchers, including of an Indian-origin, have discovered that with the help of a sound training, even the elderly can learn to ignore distractions.
 
 
New radiation device to strengthen public security
New York, Nov 23 (IANS) A new compact radiation device that can be operated in room temperature can significantly improve public security by detecting explosives, chemical agents and dangerous biological substances from safe distances, says a study.
 
 
 

Latest from the Network

Self-regulation skills prepare children for school
Washington, Nov 23 (IANS) Efforts to utilise music and games to help pre-schoolers learn self-regulation skills could help prepare at-risk children for kindergarten education, a new study says. The intervention was...
Read more on Celebrity Balla
 
Anti-HIV drugs can affect unborn babies' hearts
Washington, Nov 23 (IANS) The drugs given to HIV-positive pregnant women can cause significant long-term heart problems for the non-HIV-infected babies they carry, says a new study. Such medicines help prevent the...
Read more on Business Balla
 
Sound training helps brain keep distractions at bay
New York, Nov 23 (IANS) The ability to sustain focus on a goal goes down with age but researchers, including of an Indian-origin, have discovered that with the help of a sound training, even the elderly can learn to...
Read more on Business Balla
 
New radiation device to strengthen public security
New York, Nov 23 (IANS) A new compact radiation device that can be operated in room temperature can significantly improve public security by detecting explosives, chemical agents and dangerous biological substances...
Read more on Business Balla
 
Trinidad takes India's support to improve water, sewerage system
Port-of-Spain, Nov 23 (IANS) India's High Commissioner to Trinidad and Tobago, Gauri Shankar Gupta announced that a team of technical officials from the Water and Sewerage Authority (WASA) will visit India next month...
Read more on Politics Balla
 
Office Depot ready for Black Friday
Office Depot is looking to cash in on laptops and tablets for the upcoming 2014 version of the Black Friday selling holiday. Office Depot plans on offering huge deals on several name brand computers. The company says...
Read more on Black Friday Countdown
 
Amazon set for Black Friday
Black Friday does not officially kick off until November 28th but one company who is taking a different approach to the holiday selling bonaza is Amazon. The company announced this week that their Black Friday specials...
Read more on Black Friday Countdown
 
39 injured as earthquake hits Japan
Tokyo, Nov 23 (IANS) At least 39 people were injured after a 6.7-magnitude quake on the Richter scale hit Japan, media reported Sunday. The quake hit Nagano City and Hakuba village in Japan, where at least 10 homes...
Read more on Politics Balla
 
Three killed in mine explosion in Malaysia
Kuala Lumpur, Nov 23 (IANS) At least three workers were killed and 24 others, six of them serious, injured in an explosion in a coal mine in Malaysia, media reported Sunday. The explosion took place in a coal mine in...
Read more on Politics Balla
 
UN slams terrorist attack in Kenya
United Nations, Nov 23 (IANS) UN Secretary-General Ban Ki-moon condemned the terrorist attack on a bus in northern Kenya that left at least 28 people dead. "The secretary-general condemned the attack Saturday on a...
Read more on Politics Balla