So, thank you and goodbye, News International? Goodbye Times, Sunday Times and Sun as well as the News of the World? Goodbye, for that matter, Sky News – and maybe even News Corp.’s (NSDQ: NWS) 30% holding in BSkyB? (NYSE: BSY) The idea has been floating around ever since James Murdoch canned Britain’s biggest-selling Sunday paper. Now, almost day by day, New York commentators are pushing a big bang theory of News International destruction.
Here, hot off the presses, is Matthew Doull in Adweek, a self-confessed Murdoch admirer in the past. “The atmosphere in Britain now is so poisonous now … that selling up is the only viable option,” he writes.
But worry not. “Just as Murdoch himself snatched control of the News of the World from Robert Maxwell in 1969 by presenting himself as a harmless antipodean alternative to the then better-known and more-reviled ‘bouncing Czech’, so there are plenty of would-be newspaper magnates who could step in to buy News International to give the impression of a new broom.”
Like? Um … like the “Russian oligarch and former KGB man, Alexander Lebedev”. Like Roman Abramovich or the aluminium magnate Oleg Deripaska. And “inevitably there are sheikhs and Chinese who might also fancy ownership of the Times, Britain’s oldest daily paper, and the Sun, its highest selling”.
And there is cause for pause. It’s easy to say that the rest of New International should be sold – and to advance very cogent reasons why News Corp board members and big corporate shareholders would cheer it on its way. Frankly, seen from New York, this UK row involves tiny sums of money as well as huge, troubling problems. If ditching the News of the World involved only 1% or so of total revenues lost, the whole of Wapping could be knocked down on an auction block tomorrow and forgotten the day after. Would Rupert Murdoch be sad? Probably. But he sold off his US papers in a trice (as well as his Aussie passport) to get Fox TV. Sadness and business don’t sit naturally together – especially around an increasingly hostile board table where the Murdoch family’s 30% (upped a bit on Tuesday in a defensive share buyback) doesn’t guarantee control or the easy passage of power to young sons looking out of their depth.
But here’s the point to ponder. It’s easy to say the papers can be sold. It’s much harder to say who they could be sold to.
Remember, there’s one bid for the Sun half-tabled a few months ago. Richard Desmond made Murdoch an offer he did refuse. Presumably he’ll come back to bid. Oh goody! Out goes the discredited owner of the Bun and Sky. In comes the saintly owner of OK!, the Star, the Express and Channel 5.
But if not Desmond, then who? Trinity Mirror’s share valuation has dropped into League Division Three. There is no UK or American group who’d fancy a soiled Sun. Maybe Axel Springer? And, as for the Times and the Sunday Times, they’ve lost over £120m between them in the last two years. Enough red ink to sweep Lebedev far downstream.
Newspaper circulations and revenues are shrinking (some would say inexorably). That’s another reason for Murdoch to sell, but not for anybody to buy – unless they’re fed up with buying Premier League football clubs or yachts to entertain Peter Mandelson on. The assumption of so much speculation now is that plurality will be rescued only when Murdoch walks away. An alternative outcome is that plurality will shrivel even more as at least three papers drop out of the market.
Be careful what you wish for? Of course. That can’t and shouldn’t take the heat off New International. But it does argue for a certain caution about benevolent events thereafter. What happens next may be nothing – and that means nothing good.
This article originally appeared in TheObserver (Guardian).