Opinion

The Great Debate

from Breakingviews:

Time Warner can justifiably hold out for more

By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Time Warner can justifiably hold out for more. Though the $80 billion takeover bid from Rupert Murdoch’s Twenty-First Century Fox includes a 20 percent premium, his quarry may well have been on track to achieve that on its own with a bit more time. The Looney Toons-to-HBO group’s Chief Executive Jeff Bewkes has a reasonable degree of negotiating power.

A 35-year Time Warner veteran who became boss in 2008, he is well versed in the ways of deal-making. Bewkes lived through the creation of the conglomerate, including the acquisitions of Warner Communications and Turner Broadcasting and the notorious merger with AOL. He also spearheaded some of the subsequent dismantling, whereby the company jettisoned theme parks, music, books, sports teams, the internet unit, cable operations and ultimately the magazines that originally begat the empire.

What’s mainly left is a solid collection of cable networks like CNN, TBS and TNT, the pay-TV powerhouse HBO and the Warner Bros. film and television studio. Though Time Warner’s EBITDA margins were better last year than in the comparable divisions at Fox, they’re also not growing as quickly. Even so, it isn’t hard to see how Time Warner’s shares might increase from the pre-offer price of $71 apiece where they were trading before Murdoch’s offer was revealed on Wednesday.

Turner stations should generate about $4.3 billion of EBITDA in 2015, according to Evercore analysts. On a multiple of 12, they’d be worth $52 billion. The lumpier studio business, behind hits like “The Big Bang Theory” and “The Lego Movie,” at 11 times estimated earnings of $1.8 billion creates another $20 billion. And the well-established “Game of Thrones” producer HBO, at 10 times projected EBITDA of $2 billion adds $20 billion more.

from Breakingviews:

Dual-share inequity to figure in Time Warner fight

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Rupert Murdoch has one last big takeover left in him. Time Warner makes the perfect swan song for the 83-year-old media mogul. The HBO-to-Looney Tunes conglomerate sits at the top of a pyramid where content is king, has no controlling shareholder and poses few insurmountable antitrust hurdles for Twenty-First Century Fox. But winning won’t just be a matter of price.

To secure his prize, Murdoch needs to be open to ditching the sort of second-class corporate governance that has, ironically, given him the chutzpah to attempt courageous bids like this $80 billion-plus tilt for Time Warner. Specifically, Murdoch will need to consider converting Fox into a one-vote, one-share company to win the battle.

from Nicholas Wapshott:

Rupert Murdoch’s troubles are far from over

News Corporation CEO Rupert Murdoch leaves his flat with Rebekah Brooks, Chief Executive of News International,  in central London

The acquittal of Rupert Murdoch’s favorite executive, the flame-haired Rebekah Brooks, on charges of phone hacking and destroying the evidence might have marked the final act in one of the most bruising and expensive chapters in the history of News Corp.

It hasn’t turned out that way.

The $85 million that Murdoch paid to help keep his protégée out of jail has done little more than stoke the fires of resentment against his company in Britain. It also reminded U.S. federal authorities of the likelihood that similar crimes have been committed in America.

With convictions secured in Britain for bribing public officials, there is already enough evidence for U.S. authorities to pursue News Corp. under the Foreign Corrupt Practices Act. Which may be why the FBI requisitioned 80,000 emails from News Corp.’s New York headquarters.

Punch Sulzberger and the trouble with media dynasties

It is easy to imagine the look on the faces of Rupert Murdoch’s children when they read the obituaries of New York Times owner Arthur “Punch” Sulzberger, whose father thought him too stupid to run the company. Particularly when they came to the line: “It’s impossible to be an assistant to your father.”

Rupert Murdoch’s eldest son, Lachlan, is exiled to Australia after complaining his father wouldn’t let him do his job at News Corp. His daughter Elisabeth’s movie company, Shine, may be owned by News Corp, but she lives in London and keeps her interfering father at arm’s length. And after disappointing his old man by failing to smother the phone-hacking scandal at his British papers, James is scrabbling around at corporate headquarters on Sixth Avenue in New York, trying to make it work at his new job leading the company’s television interests – everything, that is, except his father’s “fair and balanced” baby, Fox News.

It is one of the truisms of business that media companies are traditionally owned by strong-willed, dynasty-obsessed, egotistical patriarchs – and in some cases, such as Katharine Graham at the Washington Post, matriarchs. It is the common thread that links Murdoch to Sumner Redstone and Mike Bloomberg to Si Newhouse. Not only do such alpha-male types revel in the power and influence they can exert atop a company reaching into the homes of millions. But these larger-than-life moguls unencumbered by interfering shareholders and fastidious directors are the only ones who can make the quick decisions and fast moves that media companies need to make it in a world of fast-changing technologies.

Romney is powerless against Murdoch’s lash

Mitt Romney must be wondering where it all went wrong. With the president presiding over a jobless, barely perceptible recovery, with most Americans thinking Obama is on the wrong track, and with his healthcare legislation widely derided, the Republican champion should be coasting by now. Yet Romney has been languishing in the head-to-head polls for almost a year, and prominent conservative commentators are complaining.

It is rare to hear such a concerted chorus of disapproval, not least with the election just six weeks away. Rupert Murdoch, at least, can say to Romney, “I told you so!” In July, he warned on Twitter: “Tough O Chicago pros will be hard to beat unless he drops old friends from team and hires some real pros. Doubtful.” It was advice Romney could afford neither to accept nor refuse. To fire his staff at the behest of the media boss who controls the nation’s most unforgiving conservative news outlets would be to follow successive weak British leaders who bent to  Murdoch’s will, with tragic results. Tony Blair, Gordon Brown and David Cameron, to name just three prime ministers, are still trying to rid themselves of the taint.

So Romney did nothing. Better, perhaps, to die as a lion than live as a sheep. Romney is hardly the sort of man Murdoch admires. He is too smooth, too well turned out, too prissy, too financially independent to pay homage to the likes of Murdoch. Romney has about him many of the characteristics Murdoch despises in what he calls the “old toffs” in England who refused to kowtow to the publisher of “family” tabloids with expletives on the cover and bare breasts inside.

Is Murdoch trying to sink Romney?

Rupert Murdoch should never go on holiday. It only makes him grumpy. He returned last month from cruising on his yacht off the coast of Croatia looking for a scrap. When Steve Jobs invented the iPad, he could hardly have imagined the havoc caused by one crabby old geezer letting rip on Twitter. Murdoch, a genius with the snappy tabloid headline, didn’t need all 140 characters to reduce Romney’s campaign to toast. “Tough O Chicago pros will be hard to beat unless [Romney] drops old friends from team and hires some real pros,” he wrote, adding the fatal one-word zinger: “Doubtful.”

Romney met Murdoch recently for a secret chat about how things were going on the campaign trail, but the relaxed Republican nominee presumptive, perhaps with his lavish family vacation at Lake Winnipesaukee, New Hampshire, on his mind, said he thought everything was just dandy. As Murdoch’s editors know to their cost, when the antipodean grouch asks how things are going it means he thinks things are going badly. As Romney’s minders did not issue a handout about the disastrous meeting, the lazy fourth estate did not know it was going on and so did not report it. But Murdoch took to his Twitter account to let the world know he was NOT HAPPY.

As Murdoch told the British inquiry into press standards, it used to be that “If you want to judge my thinking, look at The Sun.” Nowadays Murdoch’s hacks simply follow his Tweets. There is not much pretense any longer that Wall Street Journal journalists are any more independent of their master’s voice than Nipper, the dog on the HMV logo. The paper duly piled on with a blistering leading article beginning, “If Mitt Romney loses his run for the White House…” before careening downhill, accusing the Romney campaign of being “hapless”, “politically dumb” and a “failure”. A companion blast in the New York Post, titled “Mitt’s Losing Habit”, concluded that “Not all politicians are winners. Whatever Obama may or may not be, he’s a winner. The jury’s out on Romney.” Ouch.

Hypocrisy taints Murdoch grilling

Watching Tony Blair appear this week before the British judicial inquiry into press standards in London has left me feeling a little queasy. What began as an open-minded investigation into how to protect individuals from the snooping of the press in the age of the Internet has turned into a show trial to shame politicians who fell under the spell of Rupert Murdoch.

Now, heaven knows, I’m no apologist for Murdoch. His cynical approach to his readers and viewers and employees belies the fact that he is descended from sternly moral Scottish Presbyterians. He declares that the buck stops with a newspaper owner when one of his papers or journalists or printers fouls up, but when widespread illegality happens in his name, right under his nose, he forgets his fine words and lets it be known he has no intention of stepping down from his dual role of CEO and chairman of News Corp.

But I can’t help thinking that there is an unattractive element of hypocrisy when hearings into the intimidation of politicians by Murdoch and his henchmen end up as a means of intimidating politicians into confessing they were in cahoots with Murdoch. Blair was honest with Justice Leveson about the tacit deal he did so that Murdoch’s tabloids would not trash him as they had done his predecessor as Labour leader, Neil Kinnock.

Reprimand won’t stop Murdoch’s contempt

The headlines screaming from London tell the story: Murdoch “unfit” to run News Corp. The Commons committee that summoned the 81-year-old media magnate to explain how his newspapers came to hack the phones of everyone from Prince William to Paul McCartney has given its damning verdict.

Rupert Murdoch “turned a blind eye and exhibited willful blindness to what was going on in his companies” and his instinct “was to cover up rather than seek out wrongdoing and discipline the perpetrators.” The bottom line? “Rupert Murdoch is not a fit person to exercise the stewardship of a major international company.” So much for Murdoch’s attempt to pose as an affable old codger with too much on his mind to notice the lawbreaking done in his name. So much for, “This is the most humble day of my life.”

The meticulous politeness of the legislators who called him to account belied their more serious intent, to express in vivid and purposeful language the horror and disgust the British now have for the Murdoch family. The old man’s hideous talent for serving up salacious scandal and bare breasts in abundance in his “family” newspapers disguised his more sinister aim. Under the guise of providing bread and circuses for the masses, Murdoch allowed journalists and, when they proved incapable of thievery, private eyes to dig the dirt on Britain’s good and great, the better to compromise them when he needed a business favor.

Murdoch’s tweets can’t save his tottering empire

On the night Queen Elizabeth scampered back from her Scottish castle to address an angry crowd outside Buckingham Palace – the crowd protesting she hadn’t paid enough respect to the memory of Princess Diana, killed in a car crash the week before – Rupert Murdoch was in the newsroom of the London Times. “There’s your headline,” he told the editor in charge. “Queen Saves Neck!” It was a perfect tabloid headline for a perfect tabloid story.

That Diana, named after the goddess of hunting, should die hounded by a pack of snap-happy paparazzi added a vein of irony to the story of her tragic life. A similar irony informs the scandal engulfing Murdoch. The biter has been bit, a fact clearly on display when Rupert and his son James, arm in arm with their flame-maned employee Rebekah Brooks, were shoved and jostled in a London street by the newshounds of Fleet Street. Hauled before a House of Commons committee, the usually unrepentant mogul looked dented when he uttered the phrase that will litter his obituaries: “This is the most humble day of my life.”

His sense of humility didn’t last long. Nothing has gone right for Murdoch since that day of shame, yet he quickly regained his old pugilistic self using a medium that perfectly suits his headline-writer’s gift, the 140 characters of Twitter. Too cocky to hide behind an amanuensis, Murdoch is back on the attack, railing against “enemies many different agendas, but worst old toffs and right wingers” and vowing revenge. “Seems every competitor and enemy piling on with lies and libels,” he tweeted. “Easy to hit back hard, which preparing.”

from MediaFile:

Content everywhere? More like content nowhere

Will Big Media and Big Tech companies ever stop punishing their biggest fans?

Like many people, I woke up yesterday and reached for my iPad for my morning hit of news, entertainment and information, so I could start my day. (And like many, I’m embarrassed to admit it.) Padding to the front door to get a newspaper still sounds more respectable, but my iPad gives me a far more current, rich and satisfying media experience than a still-warm printed Times could ever produce.

Except, lately, it doesn’t. Yesterday morning, I saw the exciting news that Bill Simmons, ESPN’s most popular, profane and controversial writer, had secured an interview with President Obama. Simmons published his interview in podcast, text and video form on Grantland, a longform sports journalism website he founded last year under the ESPN umbrella. I clicked over to the story from my Twitter feed and saw three YouTube excerpts of Simmons with Obama. And that’s all I saw. When I hit play on the videos, I discovered ESPN had set them to be “unavailable” on mobile devices.

Moving on, I tried to read a New York Post headline that also found its way into my Twitter feed. But when I tapped in, the Post webpage that loaded was not the story I wanted to read. Instead it was a notice, which I took as an admonition, that to read New York Post content on an iPad, I would have to download the app, which retails for $1.99.

  •