Murdoch Talks-Up Channel 4 Auction

24 May 2007

LONDON: According to Dan Sabbagh, media editor of NewsCorp's UK national daily The Times: "[Government] officials are considering a £1 billion sale of Channel 4 as Whitehall examines options for raising money under Gordon Brown when he becomes prime minister."

Some observers, however, wonder if Sabbagh's apparent scoop owes less to the political rumour mill than it does to promptings from the eighth floor of 1211 Avenue of the Americas, New York.

Earlier this year, a study prepared by UK communications regulator Ofcom warned that C4, publicly-owned but commercially-funded, could become bankrupt after 2012 when its current cash reserves are exhausted.

However, Britain's ruling Labour Party has a manifesto commitment to retain C4 in public ownership - a status that has long been an undisguised irritant to Rupert Murdoch.

The latter has never concealed his ambition to expand his British television interests beyond satellite to network TV - a bill that C4 would nicely fit, especially as it has maintained viewing share.

So Sabbagh's "scoop" in Wednesday's edition of The Times is a fortuitous coincidence that will not displease his liege.

"[RTL Group and] BSkyB, which is 39.1% owned by News Corporation, parent company of The Times, are likely to lead interested trade bidders for Channel 4," he wrote - albeit failing to name his obvious source.

Sabbagh's piece also speculated nebulously on politicking by prime minister-designate Brown: "One possibility is that Mr Brown will bring in a new culture secretary to replace Tessa Jowell and make way for a sale in his first 100 days in No 10."

Continued the journo: "Ms Jowell has long been a staunch supporter of keeping Channel 4 in public ownership, arguing for diversity in the media and questioning the amount that the Government could raise in a sale.

"However, Treasury officials are keen to raise money to meet pledges to raise cash and meet other business commitments."

But however welcome Sabbagh's C4 story might be in NewsCorp's executive dining-room, its timing is arguably less than perfect.

The report's subtext could well magnify concerns among the Bancroft family - Dow Jones' largest single shareholder.

The family met Wednesday [see elsewhere in this issue] to discuss Murdoch's $5 billion (€3.68bn; £2.51bn) offer for the company and the jewel in its crown, the Wall Street Journal.

Several family members have expressed fears that if Murdoch's bid succeeds, he will compromise the integrity of the WSJ's editorial voice by harnessing it to the yoke of his other business interests.

They are unlikely to be reassured by Sabbagh's Channel 4 "scoop".

Data sourced from The Times (UK); additional content by WARC staff