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The European Union has just given Murdoch's News Corp the go ahead
for buying Italian pay-TV firm Telepiu from Vivendi Universal for
$985 million. A new entity Sky Italia will be created by the merger.
The all-clear came after News Corp offered concessions including
limits of three years on contracts with film studios and two years
on contracts with soccer clubs.
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Will Murdoch
be raising a toast soon with his DirecTV success as he did
in China sometime back?
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And as far as the far bigger prize of control of long-coveted US
satellite pay-TV network DirecTV, which will complete the last major
piece of his global satellite ambitions goes, Murdoch's the only
serious bidder left in the fray.
Murdoch said as much when he told Reuters in California on Wednesday
that DirecTV deal was now just a matter of money.
How much money? Reports say it will cost about $7 billion - less
than a third of what Murdoch was thought to be prepared to pay for
DirecTV two years ago when he made his initial pitch for Hughes
Electronics, which included America's biggest satellite broadcaster
with 9.5 million subscribers. That number had gone up to 11.2 million
at the end of 2002.
It has all worked out well finally for Murdoch who walked away
from the DirecTV deal in October 2001, furious over the "betrayal"
by the GM board (Hughes is a GM subsidiary).
Murdoch had reason to feel deceived. After all, he had then to
stand in frustration and watch a whole year of tough bargaining
go up in smoke after Charlie Ergen's rival satellite operator Echostar
threw its hat in the ring.
The reasons as to why US regulators blocked Ergen's bid have been
well documented. Suffice it to say that the regulators' decision
followed extensive lobbying from News Corp. What must have really
got Ergen's (a former professional poker player) goat is the fact
that not only did he have to finally abandon his takeover bid in
December 2002, he also had to pay $600 million in termination fees.
The four months since Ergen was forced to concede defeat have not
been without drama, what with Liberty Media's John Mallone and US
telecoms giant SBC at different times pitching for DirecTV. Malone
ultimately backed away from challenging Murdoch, instead opying
to back the News Corp bid and upping his own stake in the the company
from 17.5 per cent to 19 per cent. And on 2 April SBC dropped out
of the bidding.
It's not all over though for Murdoch. The fat lady still has to
sing what with the money that has to be raised as well as the approvals
from antitrust regulators still awaited. But the way events have
unfolded, there would be very few who would be willing to put down
bets that Murdoch will fail to net DirecTV. And if he does get DirecTV,
that would give Murdoch a global network of pay-TV businesses that
span the US, Britain, Europe, Asia, Latin America and Australia.
All bets off?
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