News Corp. Boss Rupert Murdoch Questioned on Political Timing of Failed BSkyB Bid
The mogul describes as “pure coincidence” a timetable that saw his conglomerate launch a $12 billion bid for the U.K. pay TV firm shortly after the last British general election.
LONDON – News Corp. chairman and CEO Rupert Murdoch on Wednesday described the timing of his failed £8 billion ($12 billion) bid to acquire full control of British satcaster BSkyB shortly after the last British general election as “pure coincidence.”
Murdoch, giving evidence at the Leveson Inquiry into media ethics and standards, told chief questioner Robert Jay the only consideration for the timing of the bid was a strategic board decision. "I don't think we gave any thought to the timing of it except that it would be good to talk to all the directors when they were together," Murdoch told the hearing.
Following the election, conservative David Cameron became Prime Minister and formed a coalition government, which observers expected to be more business- and deal-friendly than the Labour Party government.
News Corp.’s failed plan to acquire full control of the British satellite business came up again and again during the afternoon session of Murdoch’s first day in front of the panel as Jay probed the media mogul’s business practices and philosophy.
Murdoch said one of the biggest concerns he had about the bid was not a political issue – that it didn’t involve who was in power at the time or how such a bid might be received by legislators in the U.K. – but a commercial one.
He said: "I didn't think [the bid] was the business of government … I didn't think there was any legal thing at all. The only thing that was worrying me was that the independent directors were driving up the price to something unrealistic - to many, many billions of dollars." He added that his biggest concern about the hikes being led by other stakeholders was the difference this was going to make to the end price tag he would have to pay for the shares.
Murdoch noted the moves were adding “billions” to the price tag for the remaining stock in a company News Corp. holds 38% in. “That’s a lot of money to bring into this country and it’s a lot of money to find,” Murdoch said.
His son a day earlier had said News Corp. wanted to wait with its BSkyB bid until after the election, but not because it hoped for an easier regulatory review from a conservative government, but to avoid making the deal a topic in the elections.
Murdoch also commented that part of the drive for “more control in BSkyB” came on the back of his ambitions to put BSkyB together with Sky Italia and Sky Deutschland Sto "make it stronger".
But any suggestion that Murdoch used the power of his tabloid newspapers The Sun and The News Of The World, alongside The Times broadsheet, met with firm denial throughout Murdoch’s appearance Wednesday.
"I want to put it to bed once and for all, that that is a complete myth … that I used the influence of The Sun or the supposed political power to get favorable treatment," he said, slapping his hand on the table.
Jay was not to be put off and suggested there is a perception the 81-year-old media proprietor uses his influence “impermissibly" and that is has been a recurring theme over the last 30 years.
“Well in The Guardian and maybe The Independent [there is that perception,] but not everywhere," he responded. "After a while if these lies are repeated again and again they catch on. If people are resentful, they grab on to them. They just aren't true.”
The probing into the BSkyB takeover comes amid a British political storm sparked by the appearance of News Corp. deputy COO and Murdoch son James Murdoch on Tuesday at the same ethics panel. James Murdoch told the questioners he didn't have much interaction with British politicians, even when the conglomerate tried to acquire full control of BSkyB.
That session and questioning ended with the U.K. Culture Secretary Jeremy Hunt at the center of a political storm, having been described by Jay as a “cheerleader” for the conglomerate and a slew of calls for his resignation.
As Rupert Murdoch answered questions Wednesday at the Leveson enquiry, across town British prime minister David Cameron gave his full support to Hunt keeping his job in the cabinet during the weekly Parliamentary PM questions.
Hunt has asked Leveson to move up his appearance in front of the Leveson Inquiry to give his own side of the story and said he has no intention of resigning from his current cabinet position.
Meanwhile, the ethics probe appearances by the Murdochs have caused their first victim. Adam Smith, a special adviser to Hunt, resigned saying he acted without the authority of the culture secretary. He also said he had allowed the impression to be created of too close a relationship between News Corp. and the Department for Culture, Media and Sport.
Judge Brian Leveson brought Wednesday’s proceedings to a premature end. Calling a halt at 2:55pm, ahead of the panel’s scheduled 4:30 finish, Leveson said: "This is my decision. I think it's more important we take this in a measured way without getting too tired."
Murdoch murmured his thanks, despite showing no signs of needing to call a halt, before exiting the Royal Courts of Justice with paparazzi pursuing his blacked-out SUV down the street.
He is scheduled to return Thursday at 10am for more of the same.