Business View: He may conquer the world but Murdoch can't hold back the march of time
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Your support makes all the difference.The start of 2003 finds Rupert Murdoch in fighting form. Buoyed, no doubt, by a festive period spent with his young wife, his toddler daughter and her older siblings, he opened the year with a blast at US regulators, claiming media ownership rules were an impediment to free trade and the only issue that should be taken into account was whether media companies restrict competition.
It is a classic Murdoch moan and is somewhat ironic given his record in getting around rules that shackle others. But it shows Rupert is fit and well and ready to rumble. Given that he turns 72 in March, and that most media moguls ended 2002 either on the dole or licking their wounds, this is quite an achievement.
To tell the truth, 2002 wasn't a bad year for Mr Murdoch. News Corporation shares lost only a fifth of their value. His main challenger for the title of world's top media baron – Jean-Marie Messier – came spectacularly unstuck, with M. Messier's successors at Vivendi Universal showing they care more about French mobile phones than US film and television. Mr Murdoch's failure to secure DirecTV in a battle with Echostar was turned into potential success when the US regulators blocked the merger of the two satellite TV businesses. His UK digital TV competitors, NTL and Telewest, continued to struggle under unbearable debt burdens. And, to cap it all, BSkyB had a superb Christmas, making some inroads into terrestrial TV's hegemony.
But what now? Will Mr Murdoch turn this relative strength into an unassailable position or will we just wait for the old man to fade away and see what his successor – whichever of his family members that may be – will do with the sprawling empire?
Mr Murdoch's first challenge is to secure DirecTV. The US pay-TV market is a yawning gap in his strategic vision and he is desperate to fill it. If he succeeds, then we might expect him to warm up his plans to bundle all the TV interests into one company, which he was going to call Sky Networks, and float it off. Both the bid for DirecTV and the Sky Networks plan will need financiers to show a bit more faith in Mr Murdoch than they have been showing in most media executives recently. It will also need the equity markets to show a little more life. So don't hold your breath.
Mr Murdoch's other main challenge is to get a decent return out of China. For a decade he has sucked up to the Beijing administration, dropping controversial stories (and books) from his media, and paying homage to the whims of the leadership. Now he has to start getting an audience for his channels, and advertising revenues, to justify the investment. The run-up to the 2008 Beijing Olympics should help his cause. But he also has a new leadership to get used to. So it is make or break time for his oriental adventure.
Elsewhere there are some interesting smaller fires to put out. The troubles Mr Murdoch has with a loss-making Italian pay-TV business are not helped by the caprice of the government. There is also the issue of how much to bid for English top-flight football. Anything more than about £250m a year and everyone will reckon he has overpaid. Anything less and he risks losing the franchise and, with it, BSkyB's unique selling proposition. Similarly, if – and this has to be a massive if – NTL and Telewest finally sort out their problems, merge and start operating efficiently, BSkyB will surely suffer.
Yet for all of this, the biggest issue facing the Murdoch empire is the march of time. Sure, he lives a healthy lifestyle. Sure, he jogs every day. He probably eats more supplements than are printed with his Sunday Times. But at 72 how long can he carry on his punishing schedule, flitting between time zones, schmoozing one moment, bawling people out the next? This is not an empire run with devolved power; this is a hands-on global enterprise.
And if Rupert Murdoch steps back, what becomes of his edifice? Will it stay as one whole, or be split up into more manageable chunks? And crucially, will it be more valuable in pieces than as a whole? I suspect it might.
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