Murdoch Mulls Revival of Sky Global IPO After DirecTV Flounce-Out

31 October 2001

Following the abrupt withdrawal of Rupert Murdoch’s News Corporation from the battle for DirecTV [WAMN: 29-Oct-01], the media mogul is said to be taking a renewed interest in the future of his existing property, Sky Global Networks.

SGN, which comprises Murdoch’s satellite interests in the UK, Japan, Latin America and Asia, had been up for flotation last year but this was shelved when Newscorp started to pursue DirecTV.

Denying that the withdrawal – purportedly in protest against prolonged foot-dragging by DirectTV owner Hughes Electronics and its parent General Motors – signalled a halt to Newscorp’s stateside expansion plans, a spokesperson insisted: “We continue to have enormous interests in the US TV market. We have the leading television station, the number two ranking network and the fastest-growing cable networks in the country.”

Meanwhile, the victor, EchoStar chairman and chief executive Charlie Ergen, expressed confidence that his $26 billion (£17.9 billion) acquisition of DirecTV would not founder on the reef of antitrust regulations.

Few industry observers share Ergen’s faith, pointing out that the melding of EchoStar with DirecTV would result in a market-dominating 17 million-subscriber operation leaving many households in rural areas with no choice of satellite provider.

Onlookers also believe that Murdoch is gambling that the deal will be rejected by federal competition authorities, leaving the field wide open again – with Hughes’ negotiating position considerably weakened.

News source: The Times (London)