Murdoch Says His Bid For Rival Time Warner Was Rejected
RENEE MONTAGNE, HOST:
Rupert Murdoch's 21st Century Fox has confirmed that it made a bid for rival Time Warner, the owner of HBO, Warner Bros. movie studios, TBS and CNN, among other properties. Time Warner, apparently, rebuffed the offer, but being told no is not always the end of the story when it comes to Murdoch. NPR media correspondent David Folkenflik has covered Rupert Murdoch extensively and joins us now for New York. Good morning.
DAVID FOLKENFLIK, BYLINE: Good morning Renee.
MONTAGNE: So this was reportedly an $80 billon offer. Why would Murdoch do this at this point. What's - what's in it for him?
FOLKENFLIK: Well, it you look at it from a corporate standpoint, there are ways in which some of these properties work in tandem. He's got, you know, Fox Studios. They've got Warner Bros. They've got FX over at Fox. He could add TNT, TBS and some other properties. You know, he's made a career out of making relatively low back room, back office costs. And, you know, when people propose such mergers, they always say well, we can cut a lot of costs. But also, he's got his eye on the prize, which is a significant part of the $80 billion - would be worth the acquisition of HBO. You know, it's a premium cable property - one that he doesn't have, and it's one that it is not, in any way, advertiser-dependent. It's one that it purely relies on subscriber revenues, and that would be a way for him to insulate one of his main revenue sources from the vagaries of advertising market.
MONTAGNE: And why did Time Warner rebuff the offer?
FOLKENFLIK: Well, you know, he made his offer - Rupert Murdoch essentially controls two publicly traded companies, 21st Century Fox and News Corp, which is his newspaper and publishing arm. But he affectively - he and his family control both with about 40 percent of the voting shares. What he offered Time Warner's board was - was nonvoting shares, and that would significantly dilute or essentially erase the control that Time Warner shareholders and people that have stake in it would have in the control of that future combined company.
MONTAGNE: And what about this push for consolidation?
FOLKENFLIK: Well, you're seeing this in a lot of realms, and, you know, if you look at Comcast and Time Warner Cable, which was spun off from the greater Time Warner bit ago, you know, they are now merging. And there's this concern among those who produce content and those who have channels, people much like Time Warner and people much like 21st Century Fox - that, you know, they need more clout in order to negotiate. And you're seeing combinations happen in other spheres as well - AT&T combining with DirecTV - that you're seeing as consumers have their experience blurred in how they get content, whether it's, you know, smart phones or computers or TVs - as those lines blur, you're seeing the people who create that content feel that they have to get bigger in the realms they're in or combine with others that have their feet in some of the other pieces of the other pies.
MONTAGNE: Now, so if Rupert Murdock is known for not taking no for an answer, what do you think is going to happen next?
FOLKENFLIK: Well, you know, when he took over Dow Jones Wall Street Journal, he had made an extraordinary overvaluation of price - 5.5 billion dollars. He was turned down, and he would not take no for an answer. It ultimately eroded the family - a controlling family - the Bancroft family's resistance. In this case, he hasn't offered so much as a premium, but he could. He can always raise the price. And what he's really looking to do here - whatever else corporately - is write a new chapter. He's in his 80s. He just had to split his companies because of a scandal in Great Britain. He just divorces his third wife, Wendi Deng. And right now he wants to go off with a bang and show that he still has reason to come to the office. He's still one of the chieftains in charge.
MONTAGNE: David, thanks very much.
FOLKENFLIK: You bet.
MONTAGNE: That's NPR media correspondent David Folkenflik.