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News Corp tightens its pay TV grip with Sky deals

News tightens pay TV grip.

News tightens pay TV grip. Photo: Getty

Rupert Murdoch’s News Corp has tightened its grip on the Sky pay TV world, buying full control of seven channels on its half-owned pay-TV platform Foxtel.

They are Sky News Live, Sky News Business, Sky News Weather, Sky News Multiview, Australia’s Public Affairs Channel A-PAC, Sky News New Zealand and Australia Channel.

The deal, which has been in motion for some time, saw News buy full ownership of Australian News Channel for an estimated $20 million.

News Corp Australasia executive chairman Michael Miller said News would now commit more resources to Sky, The Australian has reported.

The move, Mr Miller said, combined two of Australia’s “strongest and most credentialed” news media sources.

“This is a significant investment that reinforces News Corp Australia’s continued commitment to quality journalism, talent and content,” he said.

“I’m excited by the prospects offered by this acquisition and to lead a company that is investing in the best news coverage for all Australians.”

“Together, we will ensure the strengths and benefits of each company are leveraged fully in the long term,” Mr Miller said, noting how the company aimed to create synergies between media businesses that serve audiences in different ways.

News had the whip hand

Talk of a possible takeover first emerged in February last year. The deal took a long time to complete as News negotiated a tricky shareholder structure with ANC.

News was able to do the deal at a bargain price of “only two or three times earnings,” said independent media analyst Bob Peters of Global Media Networks.

News Corp's Rupert Murdoch.

Rupert Murdoch takes a bath on blood testing. Photo: AAP

Before News took control, ANC was one-third owned by three main shareholders: Seven West Media, Nine Entertainment and pan-European satellite broadcaster Sky, controlled by 21st Century Fox, another Murdoch-controlled group which was spun out of News Corp in 2013.

Mr Peters said News had the whip hand in the deal because ANC’s 21-year carriage agreement with Foxtel ends in February 2017. Foxtel, 50 per cent owned each by News and Telstra, could have refused to renew the contract, allowing News to set up its own version of the Sky channels.

Negotiations become so strained that the refusal by some shareholders to countenance any changes in control and a speedy conclusion to talks saw News Corp executives draw up contingency plans to go it alone.

Murdoch loses in bio deal

Mr Murdoch is also facing losses of $US100 million ($A134 million) over his investment in the iscandal-ridden blood testing group, Theranos as a result of some powerful investigative reporting by one of his own newspapers, The Wall Street Journal.

The Journal was the first to raise doubts about the claims of Theranos celebrity CEO, Elizabeth Holmes — a billionaire at 30 and dubbed the Steve Jobs of biotechnology — about the company’s blood-testing technology.

Last year the Journal said raised concerns about the viability of the blood-testing technology and said it was sometimes not even using its technology in testing.

Ms Holmes’ stake in the group, at one point valued at $US4.5 billion ($A6.1 billion), was claimed worthless in June by Forbes magazine.

Mr Murdoch and other wealthy investors sunk $US635 million ($A855 million) into the group and some are now suing the company for having “consistently and deliberately misled its investors through outsize claims about its technology’s capabilities and potential to transform diagnostic testing,” Fairfax has reported.

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