MUMBAI: The creation of an Italian pay television platform Sky Italia through the acquisition of Telepiu has meant one less headache for Rupert Murdoch.
One of the conditions that was put forth by Murdoch in his acquisition of Vivendi Universal’s Telepiu satellite pay TV platform was that the litigation between the two parties would end. This includes Stream’s litigation against Telepiu and Vivendi Universal subsidiary Canal+’s litigation against NDS. A couple of days ago Vivendi sold Telepiu to News Corp and Telecom Italia for 871 million euros in debt and cash. News Corp will own 80.1 per cent of Sky Italia and the rest by Telecom Italia.
A year ago in March Canal Plus had filed a suit against NDS for a billion dollars. It claimed that NDS engineers had hacked its security system and then made the relevant codes available for hackers on the Internet. NDS makes similar TV security systems. Canal Plus claims that its smartcard technology allows encryption of signals by broadcasters. So the process of revenue collection from subscribers is smooth. It claimed that security measures were running fine until March 1999 when its software code was copied and published on the website DR7.com. It claims to have spent more than $US35 million on the technology. It had accused NDS of getting its smartcards and sending them to an NDS laboratory in Israel for analysis.
Murdoch now will concentrate on fighting rampant piracy in Italy’s pay TV market. He also have to contend with the free to air channels. Earlier Vivendi’s Telepiu and Murdoch’s Stream were suffering huge losses. In 2001 Telepiu lost $300mn and Stream $200mn as a result of football deals
Tag: Telepiu
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Canal+, NDS battle comes to a close
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Telepiu taken, DirecTV within grasping distance of Murdoch
MUMBAI: News Corp chairman Rupert Murdoch looks to be within touching distance of becoming arguably the most powerful media magnate on the planet.
The European Union has just given Murdoch’s News Corp the go ahead for buying Italian pay-TV firm Telepiu from Vivendi Universal for $985 million. A new entity Sky Italia will be created by the merger. The all-clear came after News Corp offered concessions including limits of three years on contracts with film studios and two years on contracts with soccer clubs.Will Murdoch be raising a toast soon with his DirecTV success as he did in China sometime back?
And as far as the far bigger prize of control of long-coveted US satellite pay-TV network DirecTV, which will complete the last major piece of his global satellite ambitions goes, Murdoch’s the only serious bidder left in the fray.
Murdoch said as much when he told Reuters in California on Wednesday that DirecTV deal was now just a matter of money.
How much money? Reports say it will cost about $7 billion – less than a third of what Murdoch was thought to be prepared to pay for DirecTV two years ago when he made his initial pitch for Hughes Electronics, which included America’s biggest satellite broadcaster with 9.5 million subscribers. That number had gone up to 11.2 million at the end of 2002.
It has all worked out well finally for Murdoch who walked away from the DirecTV deal in October 2001, furious over the “betrayal” by the GM board (Hughes is a GM subsidiary).
Murdoch had reason to feel deceived. After all, he had then to stand in frustration and watch a whole year of tough bargaining go up in smoke after Charlie Ergen’s rival satellite operator Echostar threw its hat in the ring.
The reasons as to why US regulators blocked Ergen’s bid have been well documented. Suffice it to say that the regulators’ decision followed extensive lobbying from News Corp. What must have really got Ergen’s (a former professional poker player) goat is the fact that not only did he have to finally abandon his takeover bid in December 2002, he also had to pay $600 million in termination fees.
The four months since Ergen was forced to concede defeat have not been without drama, what with Liberty Media’s John Mallone and US telecoms giant SBC at different times pitching for DirecTV. Malone ultimately backed away from challenging Murdoch, instead opying to back the News Corp bid and upping his own stake in the the company from 17.5 per cent to 19 per cent. And on 2 April SBC dropped out of the bidding.
It’s not all over though for Murdoch. The fat lady still has to sing what with the money that has to be raised as well as the approvals from antitrust regulators still awaited. But the way events have unfolded, there would be very few who would be willing to put down bets that Murdoch will fail to net DirecTV. And if he does get DirecTV, that would give Murdoch a global network of pay-TV businesses that span the US, Britain, Europe, Asia, Latin America and Australia.
All bets off?