Rupert Murdoch's Crowning deal

After coming through hard times of the British phone-hacking scandal and a divorce, Rupert Murdoch is back to the deal-making game. This month he made an audacious $80 billion offer to buy Time Warner Inc. Acknowledged as a deal winner, Mr. Murdoch rolled out this plan deemed to be his boldest attempt ever but it has been rebuffed for now.Current Time Warner CEO Jeffrey Bewkes informed his employees that the company's plans transcend any of the offers brought by 21st Century FOX.

Actress Jane Fonda says this attempt would be a catastrophe. In her interview with TheWrap on Wednesday, she went: "If that happens I'm going to be so angry at the FCC. They cannot let that happen...his news outlets do things that are unconscionable. And it just cannot happen that he becomes that much of a dominant force in American media.

It's not a surprise that Rupert Murdoch's 21st Century Fox is aiming at a colossus for itself against all odds created by cable networks and Google, for he has a track record of achieving what he wanted.

Here is the reminder of his deal with Bancroft family. The family that blatantly rejected his takeover bid for Wall Street Journal before giving in. In 1980s, he relied on his close connections in Britain to bash the media giants and seized The Times and The Sunday Times in 1981.

Jeffrey Bewkes who took his position in Time Warner 6 years ago has a completely different disposition than Murdoch's. Bewkes has been pruning the conglomerate, cutting free cable business Aol, while Murdoch brings all under one roof, in a way someone builds an empire. If Murdoch is successful in his acquisition this time, content producers HBO, FOX Broadcasting and Warner Bros will all huddle under one umbrella. Fox Sports will have the rights to broadcast baseball and basketball matches, becoming a competition to ESPN. CNN will stay out of the umbrella according to the plans revealed so far.

What made Time Warner vulnerable to a merger is its focus on the entertainment offerings only. Although Time Warner has spurned the bid, Rupert Murdoch isn't caving in any time soon.

He foresees a $65 billion revenue annually after the takeover as well as $1 bullion cost cut by getting rid of a part of sales staff.

Along with 39.4% voting rights in FOX, Murdoch family has the support of Goldman Sachs and JPMorgan banks. They can leverage the common stockholders between Time Warner and FOX like Wellington Capital Management and T. Rowe Price for their success as the deal can benefit both funds. Time Warmer will receive pressure from here. It has drafted Citigroup. Many of the Campaign's shareholders see a takeover coming, not necessarily by Twenty fist Century FOX.

The recalling of the $5 billion paid in buying Wall Street Journal, too high a price, has set off a wave of fear that once again Murdoch will arrange more cash to pull Mr. Bewkes and the board into talks. Consequently, the shares of 21st Century Fox tumbled 6%!

The only competitive threat can come to Murdoch from Internet giants like Google and Amazon which are developing the next generation TV companies.


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