Rupert Murdoch becomes an octogenarian this month, and he is keen to get his house in order. News Corp, his media conglomerate, has spent nine months in political and regulatory purgatory as it tries to buy the 60 per cent of British Sky Broadcasting it does not already own. Mr Murdoch may yet find that purgatory is the easy bit.
News Corp has agreed to spin off and fund Sky News to ease concerns that the deal would reduce media plurality in the UK. This should not be too costly: BSkyB was funding Sky News’s losses anyway, and a £40m or so annual “carriage fee” would knock only about 1 per cent off News Corp’s operating profits.
If regulators approve the deal, News Corp then needs to find a price that persuades shareholders in both companies to go along. This will be tricky. BSkyB’s investors think that News Corp, already the biggest shareholder, is trying to lowball them for the rest. News Corp shareholders still feel burnt by expensive purchases in the past. And BSkyB is a moving target: its financial performance has improved since News Corp offered 700p a share. The shares now trade at 820p.