Murdoch fires first salvo in media mergers

The bid for Time Warner may not go through, but it's an indication that the industry is ripe for consolidation.

By MSN Money Partner Jul 16, 2014 12:19PM
Credit: © Brendan McDermid/Reuters

Caption: A post that shows trades Time Warner stock on the floor of the New York Stock Exchange July 16, 2014By Matthew J. Belvedere, CNBC

The surprise $80 billion offer from 21st Century Fox (FOX) for Time Warner (TWX) may have been rejected, but more consolidation in media is likely, former Time Warner chief Gerald Levin told CNBC on Wednesday.

It's "part of the digital disruption" of the industry, he said in a "Squawk Box" interview.

"Even though content is normally king, the new age of the Googles, the Amazons, the Apples, the Netflixes all suggest that you have to be very entrepreneurial," Levin continued, "and most importantly, try and redefine your company."

"It's ultimately all about management," he added. "The ability to manage a combination. It's not just about blue-chip assets. That's another lesson from AOL-Time Warner."

Larry Haverty, associate portfolio manager of Gabelli Multimedia Trust, told CNBC a deal of this magnitude is like "two elephants playing in the jungle."

"This is basically the first salvo in a wave of media consolidation," said Haverty, following the news of Rupert Murdoch's overture.

In order to address antitrust issues, 21st Century Fox said it would sell CNN, sources told CNBC, so Fox News Channel and CNN would not be under the same umbrella.

"The industry is ripe for consolidation," he said. "I doubt there would be antitrust considerations."

"I don't think that it's happening is a surprise, but the fact that it is happening in this scale in Time Warner, which has been a very high-performing company, [is]. "It's made our clients tens of millions of dollars," Haverty said.

"We thought internally that things would happen in this sector," he said -- adding a 21st Century Fox offer for Time Warner was not "exactly what we thought."

Mario Gabelli, the billionaire value investor, tweeted his thoughts, saying Time Warner is in play.

Murdoch is said to be "determined" to buy Time Warner, despite the board's rejection. If this deal were to happen, it would not only have implications in cable TV but also in sports and movies.

"Time Warner doesn't have a broadcast network. And they have one of the most prolific, successful TV studios in the world. So if you marry the Time Warner TV studio with the Fox broadcast network, you kind of own the entire value chain," said David Bank, media analyst and managing director at RBC Capital Markets.

"The content cost synergies, you're negotiating across a massive portfolio of channels. And you're going to probably get better pricing there," he said.

Tony Wible, media analyst at Janney Capital Markets, told CNBC: "It's way under-paying for the value that Time Warner brings to the table."

"You think about this tie-up here. You bring 21st Century content to HBO, Fox ends up getting sports content. You get [retransmission fees] leverage to really improve the economics around Turner Network and other core cable networks," he said.

More from CNBC

Jul 16, 2014 1:37PM
   That's all we need is all our news networks under the mind control guru Rupert Murdock, it's bad enough today when I have to watch a station called Aljazeera to get balanced and in-depth stories. If Rupert gets his way we'll all have brains of Jell-O.
Jul 16, 2014 1:19PM
As the audience drifts away from Fox, Rupert is trying to chase them down in their lairs.
Jul 16, 2014 2:27PM
Ripe for consolidation?  Media is already so consolidated that it's large and corrupt, and being run by moneyed interests for the sole purpose of brainwashing us to give in to wealthy elites.. We don't need an even greater concentration of that.
Jul 16, 2014 2:11PM
I wish someone would buy out/take over Comcast and try to improve the poor service----it needs it really bad
Jul 16, 2014 1:51PM
The Wingers have bought up the radio AM airwaves and play non-stop hate talk on all of them. Is it any wonder that this Country is so divided. AM radio is transforming their listeners into low information followers and voters. Television is doing the same. There is NO liberal media.It's right-wing media today. Any wonder that David Gregory and all of the Sunday talk shows have become a platform for Cheney, McCain and his girlfriend Lindsey Graham almost every sing Sunday. It's always at least 2-1 in favor of the Teapublicons spewing their BS without any questioning of it's truthfulness by the hosts. If Americans don't wake up we will have the best Government that the handful of billionaires can buy.
Jul 16, 2014 2:42PM
Does it not scare anyone that I an getting "thumbs down" in advocating the First Amendment and Freedom of Speech?  This is very SCARY!  I guess all of you liberals want a totalitarian state with no dissent!  I purposely posted the post concerning the First Amendment to see how many people are so biased toward liberalism they would give up their freedoms!  Think about what you are advocating!  Guess you want to live in a totalitarian Stalinist system? 
Jul 16, 2014 12:25PM
Shut this fool down. 

Eat the rich. They are tender and worthless as humans. 
Jul 16, 2014 3:15PM
Murdock.... Old Coot, someone get a wheelchair and some sweet tea..... Anyone know what rest home this guy escaped from?
Jul 16, 2014 2:31PM
I see that my comments are again in the "worst" column.  What a shame that if you are not "liberal" (I am an independent) you automatically are relegated to the "worst" column.  Guess if you post on MSN you must tote the liberal lie(n)e.  Long live open debate and 1st Amendment Freedom of Speech!  I guess not all of us are robots!
Jul 16, 2014 3:14PM
The fear of another FOX channel has some panties in a wad. Scared of more truth being told? Sometimes it is not what is said on liberal news media, but what they omit or edit. Watching the recent events in Israel/Gaza, I get the impression that NBC supports the Palestinians. There is no mention of Israel reacting to rockets being fired INTO Israel from the Palestinians/Hamas.
Jul 16, 2014 2:28PM

Boy, lots of Saul Alinsky types on here today. They obviously read his book Rules for Radicals and have they ever been duped. 

Jul 16, 2014 3:37PM
Libs hate Foxx news cause the truth is not in them. They have the  disdaine towards O'Reilly because he reports the truth.
Jul 16, 2014 3:58PM

I have a solution and I'm asking for others to join in with ideas and answers, spread the word and lets get started and please no needless garbage unless you have a better idea:

The wealthy in the media will hate this, The population of America is roughly 307,000,000. Start there, then identify the number of taxpayers and develop a plan to construct our own, tax payer paid and controlled media. We find out how many Satellites would be needed to cover America, including daily operations. That is our cost

Next, we offer all media broadcasters, both airwave and cable to "Uplink" to OUR satellites. Instead of the Digital Broadcast TV, we go back to the 18" Dish as our antenna to receive the signals. They can get their revenue through advertising but scale back the ridicules massive amount that are shown today (typical daytime 1 hour show = 40 to 55 commercials per hour). There are so many you forget what you're watching, not to mention the mental issues that comes with that many unnecessary changes. 

Go back to the 18" Dish. Have "American" companies build a simple small dish system that becomes the new TV antenna system. No coding, no monthly fees, just TV. All the cable market people like HBO, Showtime and others can join in if they want but they would have to change to a new commercial venue. Maybe they can incorporate the commercial into the program or run them before or after a show. I'm sure that can be developed. We have just created a new industry in America and most important, JOBS. Build, Buy, Sell and service the dish.

If you go camping, you can take your system with you, if you move, same thing. It's now a small and simple system and you only pay for the equipment. The satellite system, compared to the hundreds in orbit could be managed by the Air Force, they already do that, so adding a few more "Birds" won't be a big deal plus they could charge the media providers for bringing them on board.

We as taxpayers pay for the system and pay to maintain it, we're already paying for wars, other countries and those getting rich off us but "we" would control this. If someone wants to join, follow "our" rules.

The cost spread out among tax payers would be minimal to non existent compared to cable and satellite fees. A simple solution to a serious treat to our wallets. This is simple and yes lobbyist for the media groups will be kissing major politicians booties to stop it but isn't it about time politicians start doing their job which is looking out for our interests and not their financial handlers?

We can do it people, we can do it. For once, lets stand together, pass this idea around, talk about it, send letters to the slugs in Washington and tell them for once, think about us!.

Jul 16, 2014 3:09PM
the lead in seems very misleading--as if he didn't really do anything--the game is yet to be called---
Jul 16, 2014 1:52PM
What a shame if  Murdoch cannot purchase this  floundering company.  Tim Warner is so poorly managed and their  customer support is nonexistent.  Of course the nervous Nellies of the liberal media will flip out if it happens.  After all, only liberals should own media outlets - don't ya know. 
Jul 16, 2014 2:32PM
Rupert Murdoch owns CNN as well? that means all of you who post about how he only lets one side of politics run rampant on his network don't know what they are talking about?

If you need any more proof that politics is a fixed game where both sides are playing us Rupert Murdoch is it.  He has happily been profiting off the hatred both sides spew towards each wonder it keep on marching on

Jul 16, 2014 3:28PM

In the end, we the consumers who make these people wealthy will just keep paying more and get less. There is no end in site and horrible when you see cable bills higher that the electric bill to run the entire house.

We are screwed and its going to get worse. I watch the entire Comcast merger dealings on CSpan and it was sickening. All they talked about was corporate profits, edging out competition and that consumers will only pay more and have less options.

It's amazon Fox is owned by an Australian and a Saudi National. Their network spends it waking hours blasting the President and spreading lies. Harvard and Yale have made it clear to their students, do not use Fox as a reference.

It doesn't matter if you like Obama or not, the fact that two non-Americans ream us for money, talk about our country and want more at our expense. Leave the Mexicans here, send these fools and Justin Beiber home!

Jul 16, 2014 3:42PM
blah blah Rupert.  National media bought and sold.  U all are no good for America and simply distort the truth worse than court system.  Power weak people hide behind the camera these days.  No good, true reporting any longer.  Its all the republicans have left to try and control.
Jul 16, 2014 2:35PM
Leave it to MSN to do the lying for CBS, ABC, NBC & CNN as they are messenger boys for Obama and the Dems.  Without question FOX is where the truth is and they are growing because of that. The American audience has final woke up to the fact that the so Called main stream media is dangerously bias and vile.
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