BSkyB – James Murdoch is back
This morning, two very significant statements were published by BSkyB and 21st Century Fox - that part of the Rupert Murdoch empire concerned with movie making and entertainment programming.
Following on from reports last Friday and over the weekend, BSkyB confirmed this morning that it may consider bidding for Fox's 57% stake in Sky Deutschland and the whole of Sky Italia, which Fox owns.
BSkyB, whose share price fell slightly on the news this morning, made it clear that everything was very "early stage".
"BSkyB has a clear set of plans to grow its business in the UK and Ireland, is executing these well and expects to continue to achieve excellent growth and returns for shareholders," it said.
"At the same time, the Company continuously explores ways to create further value for shareholders.
"As part of this approach, the Company initiated preliminary discussions with 21st Century Fox to evaluate the potential acquisition of its pay-TV assets in Germany and Italy. BSkyB believes at the right value, this combination would have the potential to create a world-class multinational pay TV group.
James Murdoch, who was recently announced as the co-chief operating officer of Fox, has long wanted to bring together the three Sky businesses in Europe”
"These discussions have not progressed beyond a preliminary stage, no agreement has been reached on terms, value or transaction structure and there is no certainty that a transaction will occur."
The key line in this statement is "the potential to create a world-class multinational pay TV group". James Murdoch, who was recently announced as the co-chief operating officer of Fox, has long wanted to bring together the three Sky businesses in Europe. This looks like the latest attempt.
As well as being COO of Fox, Mr Murdoch is also a non-executive director of BSkyB, in which Fox has a 39% stake. The last time Mr Murdoch attempted to create a European player it was via News Corp which at that time still directly owned the News International stable of newspapers.
The bid by News Corp to buy the 61% of BSkyB it did not already own was the preliminary move towards a European satellite player, driven by a wholly-owned BSkyB. It was scuppered after the deal blew up into a political row and News Corp withdrew its bid.
This is Mr Murdoch's plan by another route. Following the BSkyB bid collapse and the hacking controversy at News International, Rupert Murdoch split his business into a newspaper and publishing arm (which retained the name News Corp) and an entertainment business (Fox). The latter is now the vehicle for his European satellite ambitions.
The route probably sidesteps many of the media plurality concerns that were raised when BSkyB attempted to come together with News International. Ed Richards, the chief executive of Ofcom, the UK's media regulator, will certainly take an interest but it will be the European Commission which will take the lead on this possible European tie up.
When James Murdoch resigned as chairman of BSkyB over the hacking controversy, it was always clear his plans for BSkyB were unfinished business. If the preliminary discussions are anything to go by, his ambitions for a Europe-wide Sky still burn brightly in his mind.
If any deal does materialize and is successful, do not rule out Fox making another bid to buy the 61% of BSkyB it does not already own. Mr Murdoch's European master plan would then be complete.