Rupert's Not Likely To Take 'No' For An Answer

• by Thom Forbes , Featured Columnist @tforbes, July 17, 2014

You’d have to go back to the glory days of William Randolph Hearst to find a media tycoon who proves the maxim that “nothing succeeds like excess” with more gusto than Rupert Murdoch. 

He “appears to be convinced that not only will he live forever, but eventually he'll own every global media company of consequence,” writes Simon Dumenco in Ad Age. “He may be right on one or more of those counts.”

The cause for such musing is yesterday’s report that the slimmed- down Time Warner on July 8 had rejected an unsolicited takeover bid of $86.30 per share — about $80 billion — by Murdoch’s Twenty-First Century Fox, which owns the 20th Century Fox movie studio, Fox broadcast network, Fox News, FX, National Geographic channel and other entertainment entities. 

A combination of the two companies “would result in one media and entertainment juggernaut, bringing together such TV channels as HBO and Fox News Channel and two major production companies whose franchises include ‘Batman,’ ‘Harry Potter’ and ‘Avatar,’” writes the AP’s Joe Pisani.

Murdoch’s publishing group, News Corp., was split off into a separate company in June 2013. He is executive chairman of both companies and CEO of Fox, the larger of the two, as Meg James reported in the Los Angeles Times at the time.

“Time Warner, owner of Warner Bros. movie studio and channels such as TNT, TBS and HBO, said Wednesday that it had no interest in further discussions and that it could create more value on its own,” report the AP’s Ryan Nakashima and Mae Anderson. 

In a video to employees and shareholders, CEO Jeff Bewkes said that after careful evaluation of the proposal, its board had concluded that “continuing to execute our strategic plan and our business plans will create significantly more value for the company and our shareholders, and that that’s superior to any proposal that Fox is in a position to offer.”

Well, that’s that, right? Not likely. Not if you’ve been watching Rupert over the decades.

“When he and Roger Ailes were building Fox, CNN founder Ted Turner was seen as an equal, another in the large cast of moguls that directed our news and entertainment and shaped how we consumed it,” writes Andrew Edgecliffe-Johnson in Financial Times. “Now, with Mr. Turner retired, Sumner Redstone aging and companies like Comcast, Walt Disney and even Time Warner run by more sober characters, Mr. Murdoch and John Malone look like the last moguls standing.”

“Standing” is a rather static way to describe the mercurial Murdoch, a point Edgecliffe-Johnson illustrates by pointing out that “few things better illustrate the way the 83-year-old has transformed the global media landscape than the manner in which his liberal-baiting Fox News has outplayed (outfoxed, you might say)” Turner’s groundbreaking CNN.

Bewkes, on the other hand, has built value at Time Warner as a sort of anti-mogul. “Last month, Time Warner spun off magazine publishing company Time Inc. And in 2009, it spun off Internet company AOL Inc. and cable access provider Time Warner Cable Inc. into two separate companies. Years earlier, Time Warner shed its recording label, Warner Music Group,” the AP’s Pisani writes.

Fox’s bid was initiated at a lunch its president, Chase Carey, requested with Bewkes in June, Jonathan Mahler and Emily Steel report in the New York Times. 

“While the offer from Fox may have been unsolicited and even unwanted, it represented a validation of Mr. Bewkes’s stewardship of the company,” they write. “Since taking over a struggling Time Warner at the start of 2008, he has carried out an ambitious turnaround strategy, methodically shedding Time Warner’s noncore assets to transform the company from a sprawling media conglomerate into a pure entertainment entity.”

“A big merger among content owners would tilt the balance back toward the media companies” from distributors such as the voracious Comcast, as the AP’s Nakashima and Anderson suggest.

“You can get more money negotiating together than you would separately,” Janney analyst Tony Wible tells them. “It’s a chain reaction. There will be more consolidation on the content side in response to consolidation from cable and satellite companies.”

And, Wible predicts, Murdoch’s bid was just “the opening salvo.” 

“With his jaw-dropping … approach to buy US media giant Time Warner, Rupert Murdoch has made his intentions crystal-clear: he wants to become the undisputed global ‘king of content,’ and is willing to pay a fortune at the top of the market to get his way,” opines the Telegraph.

One gets the feeling there will be no Rosebud moment before the credits roll in this epic.