Murdoch making headway in sat platform plans

Sports, movies have helped drive system sales

See complete coverage of The Front Row.

NEW YORK — News Corp. chief Rupert Murdoch confirmed Tuesday the media conglom’s continuing negotiations to acquire DirecTV, but the silver-maned mogul jokingly added that he hopes not to waste too much of his remaining days in talks with the satcaster’s owner, General Motors.

“They are moving ahead slowly,” he allowed. Then, in response to a question from celeb interviewer Charlie Rose about the approach of his 70th birthday, Murdoch pulled out a list of jotted musings he’d made in anticipation of such a query.

Figuring he’s spent 200,000 labor hours on business in his life to date and projecting that he still has 70,000 more office hours to clock, Murdoch quipped, “I just have to make sure I don’t spend too many hours talking to General Motors.”

Although Murdoch refused to predict when, or even if, a deal for DirecTV might come together, it’s plain the acquisition remains central to News Corp.’s worldwide satcasting plans.

“We now have the makings of a very big international platform,” he conceded during the morning session at Variety‘s Front Row media finance conference here. “You could say the missing piece is North America.”

Murdoch went on to eliminate any move on No. 2 U.S. satcaster EchoStar, which leaves DirecTV, the nation’s top satellite-TV service. Such an acquisition from GM unit Hughes would give News Corp. an unparalleled global satcasting network, adding to its current control of giant British Sky Broadcasting in the U.K., Star TV in Asia and sundry Latin American satcasting businesses.

But Murdoch insisted News Corp. wouldn’t pose a monopoly threat with DirecTV in its fold.

“We’ll have competitors everywhere,” the News Corp. boss said. In the U.S., Time Warner and AT&T cable systems would be the conglom’s biggest competish, he suggested.

Still, Murdoch claimed satellite has key advantages over cable, chief among them a better record on customer service. He also touted satcasting’s national footprint and its potential for cheaper technological upgrades.

“All you have to do is throw another satellite up in the sky, whereas with cable you have to lay thousands of miles of wire and spend billions of dollars,” he reasoned.

Murdoch got the attention of the hundreds of investment professionals on hand for the confab when he suggested the current U.S. total of 15 million satellite households can be doubled in the foreseeable future.

“That was a big number,” Credit Suisse First Boston analyst Laura Martin said afterward of the 30 million-sub forecast.

Most satcasting growth to date has been at the expense of analog cable TV systems, Martin noted, but in the future competition will include digital cable platforms.

Murdoch said News Corp.’s U.S. push would gain from lessons taken elsewhere. “In Britain, we’ve learned an awful lot of obvious lessons,” he said. “First of all, (we’ve learned) that sports is a tremendous seller.”

Movie content also is important, he said, and suggested that’s the reason News Corp. remains active in studio film production even though “the movie business is crazy.” But he added that video-on-demand revenue will be restricted, due to customers’ limited ability to pay for such services.

In response to an audience question, Murdoch said he doesn’t foresee a time when firstrun movies will be beamed to worldwide auds over satellite television, because theater circuits would punish any conglom participating in such a scheme.

In other remarks, the ever-glib Murdoch said:

  • The AOL Time Warner merger doesn’t leave News Corp. at a competitive disadvantage, adding, “I don’t believe in their synergies.”

  • He has no interest in buying the Yahoo portal at current prices, because it lives on too-skimpy Internet advertising.

  • President Bush “seems to be a man of humility and a lot of common sense,” but his proposed tax cut should be weighted toward providing more help to middle-class taxpayers.

  • Microsoft will win its battle with antitrust regulators on appeal.

  • The U.S. news media — with the exception of Fox News Channel — has a “monolithic liberal bias.”

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