Abstract
The title reads like one of those online headlines crafted for the purposes of search engine optimisation. Nor is it entirely accurate, given that the author says so little about what the future holds beyond hinting at the likelihood of countless future mergers and acquisitions by media companies fighting for survival against the digital behemoths known as the FAANGs (Facebook, Apple, Amazon, Netflix and Google).
That complaint aside, however, there is much to admire in this detailed history of the broadcaster that revolutionised television-watching, first in the UK and then elsewhere in the world. Rupert Murdoch's launch of Sky in 1989 was a visionary innovation. Multi-channel pay TV arrived and soon prospered as millions of people forked out to watch top-flight football and first-run movies, along with a host of specialist programming.
For Murdoch, this is a sad tale because, having started the company and controlled it through a minority stake for the best part of 30 years, he failed to achieve his dream of acquiring it outright. In the autumn of 2018, he concluded that he must sell off his holding. Even that didn't go as planned, proof that the media mogul had lost the ability to dictate events.
But it is James Murdoch, rather than his father, who is the central character in the analysis by Williams, deputy business editor of The Daily Telegraph, of the corporate shenanigans that led to Sky ending up in the hands of Comcast, the US cable giant. In between the arcane business dealings, we get penetrating glimpses of Rupert's youngest son, possibly the first rounded portrait of a man who found it difficult to escape from his father's long shadow.
So, we learn that James, aping his father, “revels in playing the outsider” and taking on “the establishment”, while displaying a single-minded determination. Unlike dad, he dislikes newspapers, is libertarian, impetuous and mischievous. According to “a friend” quoted by Williams, James “likes dropping a rock into a millpond to see the ripples”.
We discover that James is “highly intelligent but also intense” and wears his heart on his sleeve. According to one colleague, he “is a super-brain”. Although “fluent in bland management jargon”, he is “more down to earth than his penchant for corporate lingo” suggests. Indeed, in private, he is said to be funny with a dry sense of humour. Seemingly “polite when sober”, he “could be an obnoxious drunk”.
These insights depend on a range of anonymous sources because most of the people Williams interviewed “were unwilling to speak openly”. It does not necessarily undermine the accuracy of his account, but it is a weakness he acknowledges while lamenting the difficulty in obtaining information because of the control exercised by corporate PRs. As Williams wrote in the last issue of this magazine: “Unattributed truth is better than no truth at all.”
James's role in the drama began in November 2003 when he was appointed chief executive of BSkyB (later Sky) at his father's insistence. He stamped his own personality on the company by forging a new strategy and by hiring in 2004, a chief financial officer, Jeremy Darroch, who proved to be an inspired choice. He worked well alongside James as they fought to secure Sky's dominance in the pay TV market while expanding into broadband.
The young Murdoch was ruthless towards rivals such as Virgin Media and BT: “Throw rocks at our house and we will napalm your village.” He was hostile towards the BBC and opposed to the media regulator, Ofcom. Yet he impressed those who worked with him and was even admired, if grudgingly, by some of his adversaries.
James's record at Sky impressed his father and, in 2007, he was made supremo of News Corp's European and Asian operations. He became Sky's non-executive chairman while Darroch took over as chief executive, a position he has held ever since.
Darroch, more buttoned-up than James and a “numbers man” renowned for his grasp of detail, guided the broadcaster to new heights. He also sought to improve Sky's external relationships, but the company's continuing link to James Murdoch was to have calamitous consequences.
The Murdochs had set their sights on News Corp acquiring full ownership of Sky in order to merge and simplify their European pay TV businesses. Aware that such a move would lead to Ofcom's involvement, they appeared to be on the verge of overcoming all setbacks when, in July 2011, the crisis over phone hacking led to the closure of the News of the World, a News Corp title overseen by James.
It forced the Murdochs to withdraw their Sky bid, and once James's part in the scandal emerged he stepped down as chairman of Sky. An Ofcom report concluded that he “repeatedly fell short” of the conduct expected of a chief executive and chairman, and that his lack of action in relation to phone hacking was “difficult to comprehend”.
James vanished from the scene, and from Britain, while his father – bowing to pressure from investors – split his company into two, creating the entertainment division 21st Century Fox, which included the stake in Sky, and a publishing arm which retained the News Corp name. James did not spend too long in the wilderness. By 2014, he was brought back into the fold as co-chief operating officer of Fox and CEO in July 2015.
At Sky, Darroch waited for another inevitable Murdochian manoeuvre. The first move, in January 2016, was the reinstatement of James as Sky chairman. At the end of the year, Fox offered to buy the 61 per cent of Sky it did not already own. Darroch and his board rejected the initial offer, but eventually agreed to accept what amounted to an £11.7billion cash bid.
James was convinced that it was in the bag until the government insisted that Ofcom should investigate the deal. Was Murdoch's company a fit and proper holder of broadcasting licences? Ofcom decided it was, but then raised a media plurality hurdle. So the takeover was referred to the Competition and Markets Authority, engendering a frustrating six-month delay.
It mattered little anyway because, unknown to Sky at the time, Rupert Murdoch was in the process of turning his whole career on its head. The buccaneering entrepreneur who had built a media empire over the course of half a century was preparing, to quote Williams's apposite phrase, to cash in his chips. He was negotiating to sell off 21st Century Fox to Disney.
When the talks became public knowledge, it was supposed, both by the Murdochs and by Disney's boss Bob Iger, that Sky would form part of that deal. But the drama took yet another turn. Enter stage right Brian Roberts, chairman of Comcast. He saw the opportunity to add a new wing to his telecoms business. The Murdochs were not interested and backed the Disney bid. It did not deter Roberts in the least. He went public in February 2018 with a bid that exceeded the one agreed between Disney and Fox.
James did his worst to frustrate Roberts. He tried, and failed, to get the Comcast bid referred to the UK regulatory authorities, which were not about to grant favours to a Murdoch. Disney was not finished either, raising its bid. Comcast then countered with a higher offer. After some legal wrangling, Comcast allowed Disney to take Fox and concentrated instead on acquiring Sky.
Sky's fate ended with a highly unusual sealed-bid auction in November 2018 between Disney and Comcast overseen by the takeover panel, in which the latter triumphed. The Murdochs had to accept the reality by agreeing to sell Fox's 39 per cent Sky stake to Comcast while Darroch, who cashed in £38million by selling his shares, agreed to stay on under the new owners.
Williams concludes that the sale of Sky was merely a sub-plot in “the end of an era for the Murdoch dynasty”. That comment is surely apposite for 88-year-old Rupert, but it is very doubtful that the world has heard the last of 46-year-old James.
