• News Corp buys 49% stake in Yes Network

    Submitted by ITV Production on Nov 21, 2012
    indiantelevision.com Team

    MUMBAI: Rupert-Murdoch controlled News Corporation is gearing up to give ESPN a fight in the US. The company has acquired 49 per cent stake in Yankees Entertainment and Sports Network (Yes), the cable network channel owned by baseball team New York Yankees and its partners.

    The Yes Network delivers exclusive live local television coverage of New York Yankees baseball and Brooklyn Nets basketball, as well as other leading local and national sports-related programming. The Yes Network also announced a media rights agreement that will keep Yankees baseball on the Yes Network through 2042.

    The media rights agreement is subject to Major League Baseball approval. The investment is expected to close by the end of the calendar year.

    Following the stake acquisition, News Corp-owned Fox Sports Media Group will negotiate distribution deals with the operators on behalf of Yes Network as part of a larger package of sports channels which would allow Yes to raise the subscriber fee. However, Fox sports channels will not manage the channel nor will provide local or national sports programming to Yes.

    The current owners - Yankee Global Enterprises, Goldman Sachs and other investors - will reduce their ownership in connection with this transaction. After three years, News Corporation may acquire an additional stake in the Yes Network that could bring its ownership to 80 per cent, at which time Yankee Global Enterprises would retain a significant minority stake in the network.

    Since its inception in 2002, Yes has grown its footprint to include local availability in New York, Connecticut, New Jersey, and parts of Pennsylvania, as well as national availability on several cable and satellite television distributors. The network currently showcases live Yankees and Nets games to approximately 9 million households in the teams? television territory in the New York area. Outside of the New York area, the Yes Network also distributes a variety of national programming to millions of homes across the country.

    "We?ve long been a believer in the unique appeal of sports entertainment. Partnering upstream with rights holders is even more important today in the dynamic media marketplace in which we compete. This is a tremendous opportunity to enhance News Corporation?s industry-leading portfolio of sports properties, while also strategically re-entering the New York market," said News Corporation Deputy COO James Murdoch.

    "The Yes Network represents the gold standard for regional sports networks and is a pioneer in sports media. We look forward to working with Yankee Global Enterprises, the network?s management team, and all of our partners to build on a decade of success and take the YES Network to even greater heights."

    Yankee Global Enterprises Chairman Hal Steinbrenner said, "This transaction underscores the great value we and our partners created in establishing the Yes Network and sets the network on the path for even greater achievements in the future. We are excited to have News Corporation as a partner. Its stature and acumen in sports broadcasting on a global scale is unmatched. We look forward to the many opportunities for growth and development that this investment by News Corporation will bring to Yes. The Steinbrenner family expects to have a continuing, long-term ownership stake in the Yes Network and we will continue our yearly commitment of fielding a championship caliber team for decades to come."

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  • Phone hacking scandal takes a toll on Rupert Murdoch's bonus

    Submitted by ITV Production on Sep 07, 2012
    indiantelevision.com Team

    MUMBAI: News Corp chief Rupert Murdoch and his son James Murdoch, who is the deputy COO of the company, have seen their annual bonuses decline courtesy the phone hacking scandal, which led to shutting of News of the World newspaper, multi-million dollar suits, arrest of top officials and deferred bid to buyout BSkyB.

    As per regulatory filings, News Corp has determined to award only half of the qualitative portion of the annual bonuses for four top executives namely Rupert Murdoch, James Murdoch, David DeVoe and Chase Carey for the fiscal year 2012.

    The company?s 81-year-old chairman and chief executive had earned a bonus of $10.4 million in 2012, while his son James earned a bonus of $5 million. As per the filing, Jr Murdoch had declined to take his $6 million bonus in fiscal year 2011 as a result of the hacking scandal.

    Overall, Rupert Murdoch?s total compensation too declined for the fiscal year to just over $30 million against $33.3 million in 2011. However, son James? total compensation increased from $11.9 million in 2011 to $16.8 million in the 2012 fiscal.

    News Corp Senior EVP and Chief Financial Officer David DeVoe and deputy chairman, president and COO Chase Carey had received an annual bonus of $4.17 million and $8.3 million respectively.

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    Rupert Murdoch
  • Elisabeth Murdoch contradicts brother James

    Submitted by ITV Production on Aug 29, 2012
    indiantelevision.com Team

    MUMBAI: Delivering a speech at the Edinburgh TV Festival, Elisabeth Murdoch made a push for the media industry to embrace morality, while stressing that profit without purpose would be a recipe for disaster.

    This contradicted her brother James Murdoch?s stand three years ago who at the same event had said that profit was the only guarantee of independence. "James was right that if you remove profit, then independence is massively challenged but I think that he left something out: The reason his statement sat so uncomfortably is that profit without purpose is a recipe for disaster," said Elisabeth Murdoch.

    ?As an industry?and indeed I would say as a global society?we have become trapped in our own rhetoric. We need to learn how to be comfortable with articulating purpose and reject the idea that money is the only effective measure of all things or that the free market is the only sorting mechanism.?

    She also unlike her brother supported the BBC. James Murdoch had taken aim at the UK pubcaster for its guaranteed and growing income from the license fee paid by UK TV owners. But Elisabeth Murdoch said, "Let me put it on record that I am a current supporter of the BBC?s universal license fee".

    Addressing the phone hacking issue which led to the closure of News Of the World, she said that she had told James to step back and that Rebekah Brooks should resign. "It was said within closed walls and Rebekah did resign."

    ?News Corp is a company that is currently asking itself some very significant and difficult questions about how some behaviours fell so far short of its values. Personally, I believe one of the biggest lessons of the past year has been the need for any organisation to discuss, affirm and institutionalise a rigorous set of values based on an explicit statement of purpose.?

    She also said that she does not want to succeed her father at the company.

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    James Murdoch
  • British MP calls for curtailment of Murdoch's power

    Submitted by ITV Production on Aug 24, 2012
    indiantelevision.com Team

    MUMBAI: British Member of Parliament and senior Labour politician Harriet Harman has launched a frontal attack on media baron Rupert Murdoch calling on Britian?s political class to forge unity to break up the Murdoch family?s media empire.

    The MP also called for setting tighter limits for media ownership once Lord Justice Leveson?s report into press standards is published in order to limit Murdoch?s power saying that the "we can?t wind up leaving the problem of media ownership untouched".

    Harman?s comments came as Murdoch?s daughter Elisabeth was preparing to deliver the MacTaggart Lecture at the Edinburgh International Television festival.

    Incidentally, Rupert Murdoch?s younger son James Murdoch?s MacTaggart Lecture in 2009 when he criticised the BBC and Ofcom for undermining free market.

    It shows the influence of one family that two members within three years get to deliver this lecture," Harnan lamented.

    She said News Corp, the owner of The Times and The Sun, with a 37 per cent market share owned too much of the media for a single publisher.

    News Corp?s UK assets include News International the publisher of The Sun and The Sunday Times, British Sky Broadcasting where it holds 39.1 per cent and British broadcast television network ITV where he has 7.5 per cent interest.

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    Rupert Murdoch
  • News Corp weighs splitting business into two

    Submitted by ITV Production on Jun 26, 2012
    indiantelevision.com Team

    MUMBAI: Rupert Murdoch-owned News Corporation plans to split the business into two verticals separating film & television from its publishing business.

    Although the final decision has not been taken, it is believed that News Corp chairman Rupert Murdoch, who in the past resisted calls for split in the business, has warmed up to the idea.

    The move comes in the background of phone hacking scandal at the company?s UK publishing business which led to the closure of News of the World tabloid and reorganisation of the top level with James Murdoch stepping down from the News International board. 

    The scandal, which is being probed by local authorities, prompted News Corp. to abandon plans to increase its shareholding in UK?s BSkyB, in which it holds 39 per cent stake.

    UK?s media watchdog Ofcom is also investigating whether James Murdoch, who had to resign from BSkyB board in April, is ?fit and proper? person to hold broadcasting license.

    News Corp?s film and entertainment business includes Fox News Channel and Fox Business Network, Star Television, Fox Broadcasting Company, BSkyB and 20th Century Fox. 

    The group?s publishing assets include The Wall Street Journal, the Times of London and the Australian newspaper, as well as HarperCollins, the book publishing company which has a joint venture with India Today Group for the Indian market.

    The move, if fructifies, will not change Murdoch family?s control of the two businesses. The family exercises effective control over the company through 40 per cent voting stake.

    The conglomerate?s outside investors are believed to be in favour of a split more so since television and film assets contribute three-quarters of the $25.34 billion in revenue for the first nine months of the fiscal year.

    News Corp.?s chief operating officer Chase Carey, who is believed to be a key proponent of spinning off publishing biz, had in May said that the management and the board had discussed the idea but didn?t have plans to pursue it. 

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    Rupert Murdoch
  • News Corp buys out Disney?s stake in ESPN Star Sports

    Submitted by ITV Production on Jun 06, 2012
    indiantelevision.com Team

    MUMBAI: The Walt Disney Company and News Corporation have decided to call off their Asian sports broadcasting joint venture ESPN Star Sports 16 years after it was formed on the premise of exploiting opportunities together in a market that was in its infancy.

    The two companies have entered into a definitive agreement under which a unit of News Corp will buy ESPN?s 50 per cent equity interest in ESS, which operates 25 television networks and three broadband networks covering 24 markets in Asia, gaining full control of the sports broadcasting entity. Disney, a powerful sports powerhouse in the US, will exit from sports in Asia.

    The transaction will allow News Corp units to own and operate all of the ESS businesses while providing ESPN more independence and flexibility in future support of The Walt Disney Company?s overall efforts in Asia, the statement said.

     
     ESS will continue to be jointly managed by two companies till the transaction, which is subject to customary regulatory approvals, closes.

    The buyout will also see the exit of ESS MD Manu Sawhney, who will be replaced by Peter Hutton, senior vice-president Sports of Fox International Channels.

    Hutton, who has spent 20 years in the international sports television business, will report to the ESS Board.

    Sawhney, who joined ESS in 1996, will be staying with the company until 31 August to work with Hutton on a smooth transition.

    News Corporation Deputy COO James Murdoch said the buyout of ESPN?s stake was in line with the company?s strategy of consolidating affiliate businesses across the globe.

    "News Corporation?s acquisition of the interest of ESS that we did not already own continues the program of simplifying our operating model, consolidating our affiliate ownership structures, and furthers our commitment to delivering incredible sports programming to consumers across the globe, and particularly enhancing our position in sports programming in emerging markets," Jr Murdoch stated.

    ESPN President of and Disney Media Networks Co-Chairman John Skipper said the company will continue to be invested in Asia through its digital business which includes ESPNCricinfo, ESPNFC and ESPN Mobile.

    "After 16 years jointly managing ESS, we have decided to independently pursue future opportunities in Asia. We are extremely proud of our role in building ESS into what it is today, and now with the growing digital landscape in Asia, we look forward to continuing to serve Asian sports fans through ESPN-branded digital businesses like ESPNCricinfo, the leading digital cricket brand in the world, ESPNFC and ESPN Mobile," Skipper said.

    "Peter is a very talented sports media executive, and we believe his extensive experience in sports rights and production will serve ESS well as the business enters into a new phase of development," News Corporation Europe & Asia COO Jan Koeppen and ESPN International EVP & MD Russell Wolff said on Hutton?s appointment.

    The disbandment of JV has been on the cards as the two media conglomerates have been competing against each other outside Asia. In UK, ESPN is in direct competition with News Corp-owned pay TV broadcaster BSkyB while News Corp is planning to launch a national sports network in US to take on dominant player ESPN.

    Will ad rates go up for sports?

    By consolidating the sports broadcasting business, Star will strive to up ad and subscription revenues to keep in line with the high acquisition prices for cricketing properties. The network strength will come into play as it inks deals with media buying agencies, cable networks and DTH service providers.

    Says Vivaki Exchange VP Sejal Shah, "The ad rates for sports will surely rise."

    Lodestar UN CEO Shashi Sinha feels that the move augurs well for the sports broadcasting genre.

    Says Sinha, "It will help their P&L and puts Star in a comfortable position. It makes sense to bring everything under one roof. Distribution revenues will improve. At the same time, in terms of ad sales buying is done on a series to series basis regardless of how many properties a channel has. The key for me is whether Star has a common ad sales force or a separate sales force that looks at the sports business."

    Mindshare?s Ravi Rao says that Star could try a clever marketing ploy by using the strength of its network. "At the same time, there will always be a demand and supply equation. The ad industry is growing at a regular rate and clients? budgets are limited. They will continue to evaluate if a property makes sense. They will see if there is a brand fit. The price of a spot will depend on the event."

    Nimbus chairman Harish Thawani, however, feels that the Star-ESPN deal will not change the market dynamics as it is not a consolidation in true sense.

    "It is not a consolidation as one stakeholder in a JV has bought out another. Consolidation happens when two rivals merge. Then only the benefits follow. Of course, negative consolidation can happen when a channel shuts shop like Imagine."

    Platinum Media CEO Basab Datta Chowdhury feels Star will become a much more powerful network from a distribution standpoint. However, it?s not going to be easy to command a premium through consolidation as entry barrier in sports for advertisers is high.

    "The price of advertisement, however, will go up if there is increase in viewership," he avers.

    No matter what the media buyers may say, Star will weigh options to make gains in ad revenues from sports broadcasting.

    Also Read:

    ESPN, Star JV waiting to end

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    John Skipper
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