Magazine article Marketing

Jeremy Lee on Media: Will Cable Trip Murdoch Up?

Magazine article Marketing

Jeremy Lee on Media: Will Cable Trip Murdoch Up?

Article excerpt

News Corporation owner's ambitions to take full control of Sky may face a determined challenge.

Once hailed as an economic oracle, the only man in Christendom to have foreseen the financial meltdown, and considered so invaluable to his party's fortunes that he appeared almost surgically attached to Liberal Democrat leader Nick Clegg, it's difficult not to notice that Vince Cable looks a bit out of sorts these days.

Having been quickly dumped by his former beau when Clegg succumbed to the charms of David Cameron, Cable has lost his avuncular charm and status as a guru. Instead, he sits, squashed, next to Ken Clarke, seeming rather out of place on the coalition's front bench.

It's no wonder he looks so grumpy. Here is a man who has not only lost the devotion of his former sweetheart to someone he patently does not trust, but also been made to come and watch him flirt and giggle with the younger model. To add to the insult, the consolation prize he has been given to soften the blow - the Department for Business, Innovation and Skills - is a pill that has lost much of its sugar coating, having been the main victim of the government's initial round of cuts.

Then along comes someone who might, just might, allow him to exercise his former influence and bring a smile back to his face - Rupert Murdoch. Cable must surely be hoping that an encounter with the Lib Dem-baiting media mogul will allow him to raise his public profile to its former level and act in the best traditions of liberalism, something he so publicly espouses, as well as possibly exact some measure of revenge on his interloper.

The decision by News Corporation, of which Murdoch is chairman, to issue a pounds 12bn takeover bid for the 61% of shares that it does not own in BSkyB has come as little surprise to the City. Indeed, given that News Corp already has effective control of the company through a majority of voting rights, it has long been treated by regulators - and frequently denigrated by critics - as a 'Murdoch company'.

It is also no surprise that Murdoch wants to take complete control of BSkyB, which is expected to post a rise in profits from pounds 638m to pounds 1.1bn over the next two years. After all, he was reluctant to offload shares early on, when its start-up costs nearly proved paralysing to News Corp. Indeed, given that Murdoch bore so many of the risks in pioneering digital TV in the UK, some may think it only right he now looks to reap some of its rewards.

More crucial, however, is that News Corp is all too aware of the dangers of being overexposed to the vagaries of the advertising market, a failing for which its competitors have paid heavily. …

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