News Corp’s global pay-TV empire set to become a reality

2 Apr 2003

Rupert Murdoch’s News Corp [Australia: NCP] is edging closer to the creation of its global pay-TV empire as bids for US service DirecTV and Telepiu in Italy look set to succeed. The group is likely to be the sole bidder for General Motors’ [NYSE: GMW] subsidiary DirecTV when it tables an offer within the next two weeks, following SBC Communications’ [NYSE: SBC] withdrawal from the race. Shares in SBC had dropped 20% since its interest in DirecTV was made public, amid concerns about it adding to its already substantial debt pile. The US pay-TV platform would give Murdoch the distribution channel for his Fox Television networks and 20th Century Fox film studio that he has so long craved. In Italy, regulators look set to approve News Corp’s offer for pay-TV platform Telepiu, in a deal that values the company at EUR900 million, following Murdoch’s offer of concessions to appease monopoly regulations. If cleared, Telepiu will be merged with News Corp’s existing Italian pay-TV service Stream and rebranded Sky TV Italia. The new company, which will become the sole pay-TV provider in Italy, will be owned 81% by News Corp and 19% by Telecom Italia [Milan: TITbl]. News Corp already has majority stakes in the UK’s pay-TV leader BSkyB and Asian satellite broadcast platform STAR TV, alongside pay-TV businesses in Latin America and Australia.

Italy