Murdoch to Export UK Sky TV Format to US

12 May 2003

Rupert Murdoch plans to transform US satellite operator DirecTV into the paradigm of his all-conquering British pay-TV unit BSkyB.

The News Corporation boss, defending the proposed acquisition of a controlling interest in DirecTV, assured lawmakers the $6.6 billion (€5.8bn; £4.1bn) deal would benefit American TV viewers.

“NewsCorp will bring a wealth of innovation to Hughes and DirecTV from its British direct-to-home platform BSkyB,” he told the House Judiciary Committee.

He boasted that over the last decade, Sky has steamrollered the opposition to become Britain’s leading digital platform, supplying 389 channels to 6.6m subscribers and pioneering new interactive services. [However, he omitted to tell the lawmakers that Sky bought out its sole satellite competitor, the under-capitalized British Satellite Broadcasting, which launched in Spring 1990 and was taken over by Murdoch’s Sky Television nine months later.]

“Upon completion of the [DirecTV] transaction, NewsCorp will bring the same spirit of innovation to the [direct broadcast satellite] business in the US, in the process redefining the choices Americans have when they watch television.”

Lawmakers, however, are concerned that NewsCorp could gain too much power over competitors by owning both DirecTV and the Fox network.

“Will Fox overcharge for its programming?” asked representative John Conyers (Democrat, Michigan), before answering sarcastically: “No, they wouldn't do anything like that!”

Despite such fears, an antitrust expert testifying before the committee supported Murdoch, arguing that NewsCorp would not be in a strong enough position to dictate prices. Moreover, Murdoch repeated his offer of written guarantees not to discriminate against competitors [WAMN: 02-May-03].

The deal has still to gain regulatory approval, though this is not expected to be a major problem. The committee has little influence on the review of the merger, but it can direct the lines of investigation taken by regulators.

Murdoch insists that the deal can revolutionise America’s television industry for the better. “This acquisition,” he continued, “has the potential to profoundly change the multichannel video marketplace in the United States to the ultimate benefit of all pay-TV customers, whether they are direct-to-home satellite or cable subscribers.”

Data sourced from multiple sources; additional content by WARC staff