JSkyB sat venture with News Corp. on the table

Looking to strengthen its presence in international satellite broadcasting, Sony Corp. confirmed on Friday it’s discussing joining with News Corp. chairman Rupert Murdoch in News’ Japanese satellite venture JSkyB.

The move raises the prospect that Sony’s partnership with Murdoch could be extended to include News’ U.S. sat-TV venture ASkyB, Wall Streeters said.

Mogul meetings

News Corp. is looking for a partner to replace telco MCI Communications, which decided last year to reduce its ASkyB stake from 50% to 20%. Murdoch is known to have had several meetings with Sony president Nobuyuki Idei in the past few months, and sources say the discussions may have ranged beyond the JSkyB joint venture. Neither Sony nor ASkyB would comment.

Murdoch reportedly wants Sony to buy a 30% stake in JSkyB, which was launched in December and will begin experimental broadcasts in April with 12 channels, increasing to 150 channels by April 1998.

But Sony said last week in a statement it has not “finalized” its decision to invest in JSkyB, and a Sony spokeswoman denied a report in Friday’s edition of Nihon Keizai Shimbun that an agreement in principle was reached Jan. 6, when Murdoch made a “secret” visit to Japan for talks with Idei.

Sold on satellite

Even if Sony does not do the deal, the company sees digital satellite broadcasting as a growth area. Idei told reporters at Sony’s annual New Year reception in Tokyo Thursday that strengthening its involvement in digital satellite broadcasting is one of Sony’s top three goals for 1997.

Sony is a major supplier of electronic hardware to the sat-TV industry, making the Digital Satellite System dishes for U.S. operators DirecTV and USSB, and it is building the broadcast center for ASkyB in Gilbert, Ariz. ASkyB hasn’t yet chosen the supplier of its satellite dishes.

Through its film studios and record companies, Sony is a major owner of movies, TV programs and music. Sony said in its Jan. 24 statement, “We are considering making full use of these comprehensive assets to enter in the broadcast business,” referring to satellite TV.

To better focus its satellite TV strategy, Sony is putting together those interests into one company linked to Sony Pictures and Sony Music, it said.

Second headquarters

Investment bankers say that given all this, Sony may be willing to extend its partnership to ASkyB, although one source says Sony may be more inclined to stay at home, with a JSkyB investment alone.

Additionally Idei said last week that Sony would establish a “second” world headquarters in New York, concentrating its strategic planning for entertainment, telecommunications and computers at that office under an exec to be appointed.

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