Milly & the BSkyB deal: why Murdoch could be heading for….


In death, Milly Dowler may have presented decent people everywhere with the opportunity of a lifetime. The Hackgate scandal and the BSkyB deal are no longer about Newscorp’s position in the UK media market: stop Rupert Murdoch here, and there is every chance his global business could implode.

In the rush to throw ordure at the Newscorp hearse over the last two days, many observers have forgotten the main reason why Rupert Murdoch wanted the rest of BSkyB in the first place: a regular profit-line that’s almost a tidal wave of cash in its own right. Rupe already made a call on the shareholders for the money to pay for BSkyB (something quite a few voluble institutions are unhappy about) but the deal makes a lot of sense for both them and him. BSkyB has a cash flow to die for – the latest figures show a staggering £3.2 billion of annual revenue – and margins most CEOs can only dream about: profits leapt to £520Million in 2010 – a 26% increase on the previous year.

But Murdoch needs this scale of money-flow because his other ventures are showing performances that range from disastrous to mediocre.

MySpace is dead and sold – for just $20Million, a fifth of the asking price. Rupert Murdoch lost Newscorp shareholders $580 million investing in and then completely mismanaging it. It was his first and only foray into social media, and the thing with these products is, putting up firewalls isn’t a good idea. The Digger isn’t good with anything that’s free or open.

Fox News in the US, meanwhile, continues to lose viewers. His manically Rightist views (so incessantly pumped out, the Channel was voted Most Biased News Station in the US last month) are not in vogue at the moment: we could argue all day and night about exactly why, but the bottom line is that Fox’s ratings declined again last quarter (Apr-June) by 6% – and significantly, 14% in the 25-54 demographic. Newscorp’s other problem here was (until recently) Glenn ‘Bonkers’ Beck, a presenter so clearly off his head, Murdoch eventually had to dump him because corporate America stopped buying airtime in his slots. But the guy did have an audience, and it hasn’t been replaced.

In the UK, rumours persist of Murdoch quietly inviting offers for his paywalled disaster, the UK Times titles. The Times (as well as its sister title the Sunday Times) has suffered a massive drop in online readership since disappearing behind paywalls in July last year. As well as the discreet ‘For Sale’ sign, there is continuing speculation that the company will rethink the policy. It would do well to hurry up about it: a misleading figure of 105,000 subscribers latterly released by the Wapping Liars actually covered total sales for the first four months of 2011. Churn is still a chronic problem, and the monthly readership is around 26,000. Before the paywall, the two titles racked up around 20 million unique users a month – more than 13 times larger than the papers’ combined print circulation of 1.5 million. The mind boggles at how much this is costing The Dirty One….and how big the drop in ad revenue has been.

But Newscorp’s great white hope is  ‘The Daily’ – a tablet format  taken up by Apple, and the subject of some pretty confident grins from Newscorp’s owner earlier this year. However, rather like his role-model the USSR, when a news blackout on data is declared, then you know Soyuz Murdoch may not be coming back. Until very recently, tales of the Daily having made a firm start followed by a dull thud were purely anecdotal. But now – with major help from the Canadian social media firm PostRank – media writer Joshua Barton has been analysing Twitter activity at The Daily since its launch. This suggests — at least when viewed through the lens of Twitter sharing — that The Daily is losing audience over time. In eight weeks there were just 6,026 tweets….and falling.  As in, falling off a cliff. Decline and churn show the same pattern as the Times newspaper: a vertical drop once trialists start being charged for the service.

So things aren’t looking good for The Man who is Always Right. In fact, strip out the money Rupe made from the soccer Premiership in 2009, and Newscorp effectively made a loss that year. As if to start managing expectations, Murdoch has sent his only son down to Earth to issue some pretty downbeat stuff about the global economic outlook – which he was doing assiduously throughout June.

Poor outlook or not, Newscorp’s hard place is now surrounded by UK rocks in the shape of disgusted advertisers, prying legislators, a whole new public inquiry, and a remarkably hasty discovery in Wapping of who sanctioned the Milly Dowler hacking: as I write, the Beeb’s political editor Nick Robinson is burbling away at the BBCNews website, and very much fulfillling Andy Coulson’s expectation of being thrown to the lions. ‘News International now know who “sanctioned and commissioned” the hacking of Milly Dowler’s mobile phone’ says the site, ‘[Nick Robinson] told Andrew Neil on BBC Two’s Daily Politics that the firm was not naming names, but claimed it was unlikely to be chief executive Rebekah Brooks.’ That’ll be Andy Coulson then.

But being a shrewd old sociopath, Rupert Murdoch knows that this will simply make his negotiations with BSkyB shareholders even more of an uphill struggle. Reports from Slog sources are suggesting the 61% majority owners want £11 a share at least. Newscorp’s initial offer was £8. That’s a big difference: where is the Old Boy going to find 38% more cash?

And I very much doubt if it will end there. Because of all the foregoing factors, and the immediate crisis Murdoch faces, BSkyB’s movers know that he must do this deal….or wind up in very bad shape as a business. There may also come a point at which BSkyB find Murdoch himself simply too toxic to have as a buyer anyway.

Only the events of the next few days will clarify some of these imponderables. But for those of us keen to consign Newscorp to the lead-lined coffin, there is a very important lesson here. This is a window of opportunity we may never have again – to wipe the stain of this ghastly organisation from the face of the Earth. Stop the BSkyB deal going through, and this (plus his rapidly elevating pariah status) will erase Rupert Murdoch’s malign power forever.

53 thoughts on “Milly & the BSkyB deal: why Murdoch could be heading for….

  1. 1433: The Daily Mirror’s Kevin Maguire tweets: Reading too much into this? Culture Secretary Jeremy Hunt nodded 3 times at Nick Soames when the MP called for pause in BSkyB deal


  2. Now questions being raised about the Sheridan trial. Emails were apparently withheld by NOTW and Coulson was the main prosecution witness. This is going to have far reaching effects including the criminality of senior officers in the Met


  3. Yesssss!!!!! News International shares down 4% in New York… Tom Watson MP calling in the House for James Murdoch and the Wicked Witch to be brought to trial… Can we dare hope that the Dirty Digger will be made to sell his UK media interests?


  4. IR
    “What we now need to know is which officers received the payments that were detailed in the internal News-of-the-World e-mails sanctioning the payments. ”

    Finaly, the world has caught up with the real story!!!


  5. Haymen had all this information when he carried out his investigation. Johnson now blaming the Met for not passing this information to the DPP in 2006 which resulted in no further action. The politicians are running for cover and making their excuses.


  6. But how extraordinary that within 12 hours of Bekky needing a scapegoat, up popped this authorisation from her old buddy, Andy Coulson. I mean fast digging or what?
    Still, never was a more deserving goat scaped….


  7. “His manically Rightist views” and later on “rather like his role-model the USSR”.

    I would probably describe Rupe as a ‘corporate fascist’, meaning that he has little interest in fair competition, free markets or democracy come to that and simply uses and abuses the capitalist system to control and dominate, not unlike Microsoft and some other big money corps.


  8. John,
    I must admit, I gave these people far to much credit.
    Do you remember, months ago, when this story first broke, I told you it had no legs?
    My reasoning being no one would be stupid enough to write down “I paid X to hack Y”

    How long till AC decides he doesnt like being the sacrifical lamb and shops his bosses though?


  9. ed.richards @
    is ”watching developments”.

    We need to boycott BSKYB and companies that advertise with NEWS INTERNATIONAL and BREAK murdoch for good.


  10. from the ongong Telegraph page

    and that the former DPP, Ken Macdonald (now Lord Macdonald) should examine his conscience now that he has gone to work for News International.


  11. do mobile phones (or even top nedia bods) ever have true holidays where they are not contactable or able to issue guidance, instructions, threats (delete as required)


  12. Newscorp shareholders being asked to sink further funds into the Murdoch power grab can also ponder the overpay for WSJ and Elisabeth’s Shine Group.


  13. They’ll try anything once…like Edmondson’s phone that went off accidentally in his pocket 37 times and rang the voicemail of Sienna Miller.
    On holiday or not, she authorised the Whittamore hack – end of.


  14. But what is the afterwards? If the Times newspapers are sold, who buys them? Sure as hell aren’t going to be British.
    Even in the unlikely event that the new owner is British, the Torygraph can hardly be claimed to be a better newspaper since Conrad got free board and lodging (that is, from the US taxpayer as opposed to the shareholders-allegedly!)


  15. perhaps / hopefully the true outfall of this episode will be that not everyone has been “dumbed down” enough to only accept that the news is what the editors say it is and that any means are fair to get a story ahead of the competition


  16. I note that the way the Indy is reporting it. Rupe is saying that the allegations of hacking and bungs as opposed to the actual acts are deplorable

    “Rupert Murdoch today condemned allegations that staff at the News of the World hacked phones and paid police officers as “deplorable and unacceptable”.


  17. I wonder what BSkyB’s independent non executive directors make of this farce.Will they be shrinking violets?Stand up Nicholas Ferguson,Andrew Higginson,Allan Leighton,Jacques Nasser,Gail Rebuck,Daniel Rimer,and Lord Wilson of somewhere.Is it in shareholders’interest to exchange a majority block for cash and shares in Newscorp controlled by the Murdoch clan,whose record does not compare with,for example,the Cayzer family


  18. Why is Glenn Beck bonkers? Name one thing he ever said that wasn’t backed by intensive research and wasn’t true. Why do we always have to be nasty to someone who tells it as it is and, yes, he uses alarmist tactics, but at the end of the day everything he has predicted has always come true. Or is the truth too harsh to take?


  19. One doesn’t have to read more than the first coupla paras of that article to know why Beck was dropped. Nevertheless, a lot of what he said on his shows made a lot of sense to a lot of people.


  20. We should be making sure we have stocks of tinned food……..

    Back in the 60s my father did this too, as nuclear war loomed.


  21. It’s an ‘old saw’ — When the shit hits the fan — The editor’s always ‘away on holiday’ — But the cretins at NOTW actually see it as a credible excuse! Belief has never been more beggared! (or is that buggered?)


  22. Does it not strike others as a shame and a sad indictment of our times that it’s taken this long and for revelations so profoundly ‘in your face’ to raise the public’s awareness of the malignant ambitions of this particular megalomaniac.

    Assuming everyone here is more than familiar with at least the majority of the most important facts, I’ll jump straight into some cynical deduction:

    Imagine how convenient and appetising it would be for a self-perceived Ruling Class to have a cosy, quid pro quo, “we know your dirt, you know ours” relationship with the primary provider of media to the majority of the population under their “care”. It would certainly significantly aid them towards selling all their positions, actions, decisions and propositions on state matters to the populous. And it would certainly help ‘control’ interpretation and reaction by the “electorate” on such matters. Evolve this point as far you as wish.

    And I suppose we must have to talk politics, whether that be Red, Blue, Yellow, Green, Pink, or Purple! As an individual party their cooperation, in ensuring (e.g. all hackgate culpability) that the ultimate goals of this relationship come to fruition, is encouraged and motivated by said media provider guaranteeing disproportionate but discreet support during elections.

    Despite the apparent gloom and doom of our establishment’s current state of affairs we should perhaps have renewed faith that all is not lost or rotten. Because surely for these unsavoury matters to have even been given the light of day means there must still remain some forces of honesty, integrity and honour in the press, police and politics.

    It’s either that or………. cui bono. And I can think of some.

    Food for thought.

    Anyway, when is X Factor back on?


  23. “In death, Milly Dowler may have presented decent people everywhere with the opportunity of a lifetime”

    John, you can’t write that sort of stuff. It is crass and hurtful in the extreme (as I am sure a moment’s reflection will confirm for you). I’ve been fuming about this all day. Please think before you hit the button.


  24. My eh? was meant for old dog – haven’t a clue what he is on about. But BT, you are absolutely right. Beck does make a lot of sense to a lot of people but we crucify anyone who is remotely right wing and tells it as it is. It just doesn’t sit with the commie/liberal/sandal wearing/feminist elite to hear the truth. I’m sure this is not the end of Beck, but unfortunately before too long he will find himself with a fatwa on his head.


  25. Am I being too simple but hasn’t NOWT scored another own goal with their Plan B for Becky, namely, she was on holiday. To my simple mind this goes to show a) when she was in the office she knew about the hacking, because, b) when she was on holiday no-one thought it necessary to get her approval as the hacking of Milly Dowlerwas within their ‘normal’ Wapping modus operandi? Please correct my analysis


  26. The FT today says it expects te BSkyB deal to be waved through when the MPs are on holiday.

    Oborne in the DT says PM is at a critical point in his premiership. Handling it wrong and he is damaged goods forever.

    The phone hacking by itself is a bit of a sideshow, just the door opener to all the criminality that goes for normal practice at NI. The critical issue has been the near monopoly media powers of NI by a foreign owned institution something which would be impossible anywhere else especially in the US and Australia, Murdoch’s two homes.

    Monopoly leads to economic rents which lead to c€orruption and, boy, do we have that, whilst smugly believing our public life is morhonourable than elsewhere. NOt so! Transparency International puts us 20 out of 180 countries in terms of corruption well behind Hong Kong, Singapore, Scandanavia, Ireland (yes!), Canada, New Xealand and Australia.


  27. For completeness I should have added the b. obvious point c) to my previous blog; c) if the anointed Becky actually did not know these activities were rampant at NOTW, the staff under her leadership were totally out of control and she should be sacked for gross incompetence and failure in her duty of care and trust.
    What defence can the Dirty Digger come up with or will he use Max Clifford’s assertion and say that he’s known her for many years and she would not be a party to such activities (as though that was worth BBC giving MC airtime to espouse) and if innocent how on earth can she be viewed as competent to head the ‘clean up’. Especially as apparently she saw no evil, heard no evil and spoke no evil when it was all around her?


  28. Or is this just a warning shot to Cameron – we’ve released the dirt on Coulson and any rowing back and we’ll release it on you too?


  29. A quick, albeit unsurprising, observation. I follow Piers Morgan on Twitter – I won’t even start to try to justify why – but he has been utterly, wholeheartedly and totally silent on the phone hacking issue. Not a peep. Nada. Nothing. Plenty of other trite (and occasionally amusing) tweets, usually some sort of self-promotion or bating of Alan Sugar, but absolutely nothing on the NotW saga. I would suspect he’s somewhat concerned that the history trail will head into pre-Wade/Brookes territory.


  30. quote- “and that the former DPP, Ken Macdonald (now Lord Macdonald) should examine his conscience”

    If he had a conscience? Perhaps, but…

    I am very interested in the developement of the Sheridan case. Not that I have any particular interest in the man himself (eugh). However, It should open up a whole new era about “reporting” “news”. Making the news by inventing it ?, breaking up families, sordid, sleazy second rate ramblings of (z) list celebrities. up-to-date-news about hags, slags, and sad “baw” bags. Thankfully, this may well be a turning point. Ahh… back to the days of investigative journalism to have information which is determental to society, or could impact health and well being of citizens. I just wonder who will ” be found under a tree having killed oneself” in the aftermath of this initial state of affairs.

    Just for the record…The police can be paid for information or to assist persons… I didn’t know that , I thought that was called a bribe AND I thought that was illegal. Apparently not.
    Oh who knew…

    Or rather who should know!
    Inland Revenue: Delared income
    Police Commision ethics committee: With holding evidence of crimes for personal gain
    OR issuing information for personal gain.
    I must go and check out words in the dictionery.
    Democracy and Justice. I know those words, I have seen people die, so others have the right to have those words etched in thier flag waving hands and heart..


  31. Well, in case anyone’s missed it NI have announced that the NoTW is to close. This Sunday’s edition will be its last.

    Rupe’s sacrificial lamb being slaughtered? hhmmm.


  32. NoW has now been pulled, but any senseless person will know that some other newspaper, maybe, The Sunday Sun, will take over. I dont think this means anything to be honest. What worries me more is do we have a strong enough government to stop the bSkyb bid? Unlikely. Hopefully, other Newspapers and also politicians will see this as an opportunity to get into the heart of Murdoch. The author is right..

    “This is a window of opportunity we may never have again – to wipe the stain of this ghastly organisation from the face of the Earth. Stop the BSkyB deal going through, and this (plus his rapidly elevating pariah status) will erase Rupert Murdoch’s malign power forever.”

    I will be having a watchful eye over this and more so over Cameron. Hes been in bed with NewsCorp from the start so it will be interesting to see what he does!!

    All we can count on is RedEd and other opportunists to go in for the kill, unless their all in bed with Murdoch. However, I feel all thats going to happen is the Journos who done wrong, Coulson and any Policeofficers will be punished and Murdoch/Cameron will use their influences/propaganda respectably to make out the evil is over and we can live our lives as normal, by simply hopnotising the nation into thinking all is well again. My heart says it wont stop here and Murdoch will be wiped off forever but my brain is shouting ‘Dont ever be hopeful, thats being foolish!’


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