Michael Hedges puts his finger on the difference between other corporate media owners and News Corporation. The former "trade on a stony conservatism that resists risk." Rupert Murdoch's News Corp dares to risk at every turn.
That's why it has offered £7.8bn to acquire the whole of BSkyB thus, to quote the Financial Times, defying conventional wisdom by dipping into cash reserves when his company "should now be returning some to shareholders or spending it in one of the sector's growth markets."
However, this is to overlook the fact that BSkyB is a growth market for cash. As Hedges rightly notes: "With 10m subscribers the UK pay-TV broadcaster spins money like no other."
But he moves on to look at the effect of News Corp owning the satellite broadcaster within the context of a rapidly changing British TV environment where ownership rules may well be relaxed.
He cannot be sure what Murdoch is really up to but contends that he gives "the appearance" of "cashing in" on his support for the Conservative Party. "Some Murdoch watchers note how quickly he waved the IOU," he writes.
Murdoch may also perceive the need to move quickly, to take advantage of a window of opportunity before the coalition crashes. Then Hedges muses:
Would BSkyB offer a free-to-air channel? Impossible: regulators would never approve and, anyway, it would go against the Murdochian pay-only principle. Shareholders and stock traders would punish.
But anything is possible when risk is in your blood and shareholders calls are diverted to a pay-phone on Mars.
Sources: FollowTheMedia/FT
