It looks like he’s at it again: 83-year-old billionaire Rupert Murdoch has made a play to take over Time Warner in what would be one of the most expensive media mergers in history. 21st Century Fox offered $80bn (€59bn) to create the world’s largest film-and-television company but the board and Time Warner CEO Jeff Bewkes said “No thanks”. His reason: an independent Time Warner will create more value for its shareholders than any merger could.
That seems hard to believe with Murdoch offering a 22 per cent premium on each and every share – something that it might be difficult to convince stockholders is a bad thing. Murdoch has long seen consolidation as the media world’s future and it seem unlikely that he will stop at this initial offer. He has a history of getting what he wants.
Many of you will remember the disaster that was the AOL-Time Warner merger at the peak of the tech bubble but this time around it looks like Murdoch was waiting for the right moment. Over the last few years, Time Warner has spun off many of its other brands including, of course, AOL, as well as its publishing unit and even its billion-dollar headquarters on Columbus Circle in New York. All that is left is a relatively profitable business made up of its film-and-television units. Perfect timing if you ask me.
If a bid is eventually accepted by Time Warner – and I think it will be – it’s interesting to note that CNN would have to be sold off because it would compete directly with the Fox News Channel. I’ve heard some interesting companies mentioned in connection to a CNN bid, including Google and even Alibaba. Both businesses have been trying to get into content creation and this could provide a good opportunity to do so.
Imagine the type of access the cable news network could have on digital if it partnered with Google, for example. Could it revolutionise the relationship between linear and digital? Could it, with its online reach, make CNN the number-one network again? Possibly.
The only way Rupert Murdoch’s goal of gobbling up Time Warner might not happen is if Time Warner joins up with someone else. There’s a real possibility that Time Warner and CBS could join forces – or what about Disney?
Most people on Wall Street may have thought the mega merger to be dead but some 14 years later, we have ended up with an 83-year-old businessman from Australia telling them he was just waiting for the perfect moment.
Phil Han is a presenter and producer for Monocle 24.