Rupert Murdoch plays the Game of Thrones
Murdoch's bid for Time Warner has been rebuffed, but it is unlikely the mogul will stop there
American media giant Time Warner confirmed yesterday that it had rejected a takeover bid from 21st Century Fox – part of the business empire controlled by Rupert Murdoch.
Time Warner, which makes the hit series Game of Thrones, said that the bid, worth roughly $80bn, was not in its best interests or those of its shareholders. But analysts say that Murdoch is unlikely to stop there and remains determined to acquire the brand.
Why does Murdoch want Time Warner?
A merger between the Fox and Time Warner would create an entertainment conglomerate bigger than Disney, and The Guardian says Murdoch wants to do the deal for sake of his business and his family. "The octogenarian has long been keen to secure a final mega-merger before handing the reins of his media empire to the next generation of the Murdoch family," the paper says.
The bid comes at a moment when traditional media is being challenged by new media, explains the New York Times. "By bidding for Time Warner, Murdoch's 21st Century Fox is seeking to create a colossus in the television and film industries at a time when both face pressure from the growing power of cable companies like Comcast and online video giants like Google."
The deal would give Fox, which already owns the movie business behind films such as Avatar and Titanic, access to HBO's television programmes, including the huge worldwide hit show Game of Thrones. It would bring together disparate sports and entertainment products including Nascar, The Lord of the Rings, The Sopranos, Dawn of the Planet of the Apes and Major League Baseball, the New York Times notes.
Why was his bid unsuccessful?
Time Warner said it rejected the bid because it doubted Fox's ability to manage the newly enlarged business. The company also questioned the value of the deal to its shareholders. "There is significant risk and uncertainty as to the valuation of 21st Century Fox's non-voting stock and 21st Century Fox's ability to govern and manage a combination of the size and scale of 21st Century Fox and Time Warner," Times Warner said in a statement.
Another prospective stumbling block is that owning CNN as well as Fox, not to mention Time Warner's cable channel businesses including TNT, TBS and HBO would present regulatory issues. However, Murdoch has already indicated that he would be willing to sell CNN as part of any deal to prevent such problems.
Will the deal eventually go through?
Murdoch's biographer Michael Wolff told USA Today that the rebuff would have delayed his plans, but would not have ended them. The deal "is not a surprise", Wolff said. "Rather this is a choreographed dance. Murdoch would not have made the offer if he did not have reason to believe it would be successful".
What happens next?
After a prolonged period of professional difficulties, including the phone-hacking scandal, the pursuit of Time Warner returns Murdoch to his "classic daring deal-making ways", the New York Times says.
BBC Business editor Kamal Ahmed says that Murdoch "is likely to be back with a fresh offer". Wolff agrees, saying that the most likely next step will be simply that "the price goes up".
So is the deal a fait accompli? As Forbes's Dorothy Pomerantz says, "Murdoch is a mogul who is not easily deterred". ·