BSkyB bid withdrawn – but can Murdoch still win?
We are in uncharted waters. In my working lifetime I have never known the Opposition Party to put down a motion in the House of Commons, which the Government of the day decides then to endorse and vote for. Today is therefore likely to prove an historic day in which MPs will bind together on behalf the nation they represent to call upon a commercial entity to end its endeavour to take over another.
Two nights ago on Channel 4 News, Michael Wolff, Rupert Murdoch’s biographer, declared that the tycoon “does not explain, he speaks power to power.” With tonight’s vote that power in UK political terms, is spent. Every ounce of political capital is spent. No senior political figure will entertain him, rare will be the politician who even takes a phone call.
See my interview with Michael Wolff: Rupert Murdoch facing ‘end game’
One of my most informed sources – who combines politics with a significant high-level international business life, tells me that despite all this, Mr Murdoch “will be absolutely determined to continue with his company News Corp’s bid to take over BSkyB. Even if it involves sacking his son James and his protégé Rebekah Brooks.” My source added that eventually it might even involve his own “moving upstairs” to become the non executive President of News Corp. But Murdoch’s determination, my source adds, is that he will get BSkyB.
Ranged against this dynamic, and beyond the “voice of the people” expressed on the floor of the Commons, is the police investigation into the hacking scandal. Assistant Commissioner Sue Akers told MPs yesterday that her team “will examine criminal liability at board level, in due course” – adding that the “New management of News International (the News Corps subsidiary that owned the News of the World) has not been helping as much as she had hoped”.
Enter US Senator Jay Rockefeller, Chair of the prestigious Senate Commerce Committee. He has been scandalised by reports that the NoW had private detectives hack the phones of families of 9/11 victims. He is calling for an investigation his side of the Atlantic. Wire tapping, hacking and the rest are viewed far more seriously in America.
Set against this that Rupert Murdoch remains one of the most successful corporate operatives the planet has ever known. His family’s wealth within News Corps, despite market falls that have cost them (according to today’s FT) three quarters of a billion dollars, remains in the many billions. BSkyB is a vastly profitable entity in and of itself. Hence, the Murdoch empire’s interest in securing all of it. With 152 subsidiaries already and the brilliant use of legal tax havens, News Corps pays only 20 per cent corporate tax in the US as opposed to the normal 35 per cent. The Economist reported in 1999 that since 1987, News International had paid no net corporation tax in the UK on £1.4bn profits. Make no mistake, this is a company that combines desirable commercial content with a keen eye for hanging on to its profits. 100 per cent ownership of BSkyB would augment that handsomely.
The issue is finely balanced and may take years to resolve. But irrespective of how many MPs vote against the take over, Rupert Murdoch can, and very possibly will still win, however bloodied by the battles – criminal, legal, political and corporate, to come.
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