Wider still and wider: the old rogue Rupert Murdoch looks set to invade Germany
STEPHEN GLOVER
Earlier this year I wondered whether Rupert Murdoch might be in financial trouble. I didn't have a shred of evidence that he was. It was a sort of instinctive suspicion. Like all media owners, he is exposed to the dire advertising recession — more so than many because of his television interests. (When advertising is thin, newspapers can downsize. Television channels can't so easily get rid of programming, and have a pretty fixed number of advertising slots. This partly explains why Channel 4 lost £20 million last year.) My intuition that Mr Murdoch might be in difficulties was also fed by reading Neil Chenworth's excellent new biography of Mr Murdoch. This reminded us how, during the last advertising recession in 1990, one obscure American bank nearly brought down Mr Murdoch's entire empire over a loan of a few million dollars.
Well, I can't say for sure that Mr Murdoch won't go bust. He himself said a couple of months ago that the global advertising slump in the final quarter of last year was the worst since the second world war. But, whatever his difficulties may be on that front, he has just won an important victory in the digital television war in this country, and he may be about to collect the spoils in Germany. To most of us, of course, digital television is a rather boring subject. The way to appreciate this story is to see that Murdoch — who, whatever else he is, is not boring — has triumphed again while his rivals are in receivership.
Last week ITV Digital collapsed. The company, owned by Granada and Carlton, is unable to pay Football League clubs the astronomical sums it had agreed. Possibly it will limp on in some form if a compromise with the clubs can be agreed. The point is that the demise of ITV Digital leaves the field open to its rival BSkyB, of which Mr Murdoch, or his company, owns about 37 per cent. In effect this shareholding gives him control, though BSkyB's chief executive, Tony Ball, occasionally reminds Mr Murdoch that there are other shareholders. But it was Mr Murdoch, above all, who engineered the collapse of ITV Digital. BSkyB gave away digital boxes, forcing ITV Digital to follow suit. Though BSkyB was itself plunged into losses, it drew many more subscribers than its rival. It also offered a more attractive package of programming, though that may not be saying very much.
While ITV Digital was slowly dying in this country, another pay-TV company has been
running into trouble in Germany. Premiere World, part of the Kirch group, has failed to find enough subscribers. This has precipitated a collapse of the media empire of the 75year-old Leo Kirch. BSkyB happens to be a minority shareholder of one of his companies, KirchMedia. A fellow investor is Silvio Berlusconi, the billionaire media tycoon and Prime Minister of Italy. Murdoch and Berlusconi are circling the choicest remains of the Kirch group, which include a 40 per cent stake in Axel Springer, publisher of the mass circulation tabloid Bild. So it is theoretically possible that Murdoch might end up by controlling Germany's answer to the Sun. But it is more likely that he has his eyes on Kirch's television interests which, in addition to Premiere World, include half of Germany's commercial television. The prospect of Murdoch becoming a media magnate in Germany, and possibly exerting political influence, has inflamed many German newspapers and left-wing politicians. But Berlusconi, because he is seen in some circles as virtually a fascist, is regarded even more unfavourably and, between the two, Gerhard Schroeder, the German Chancellor, has expressed a preference for Mr Murdoch.
The outcome of all this is very difficult to predict. Mr Murdoch has called a meeting of bankers and investors this week in Los Angeles. It seems likely that one way or another he may become a significant media owner for the first time in a non-English-speaking country. Whether in the longer term this would have any effect on his views on the euro, I will leave others to speculate upon. My point here is that while ITV Digital and Kirch's Premiere World have made a cockup of pay-TV — and other European pay-TV companies are also struggling — Mr Murdoch's BSkyB has won through, and is now in a position to capitalise on the failures of its rivals. All this is alarming the British government which, while openly friendly with Mr Murdoch, does not wish him to reign supreme in the digital future it has decreed for us. Whatever you think of Rupert Murdoch — and I am very far indeed from being his greatest fan — there is no denying that the old rogue has triumphed again.
Asa combatant in the war between the Daily Mail and the BBC, I had better declare an interest. It does seem to me that the BBC was not true to its old values on Saturday evening. It should have cleared the schedules, as it did after the death of Diana, Princess of Wales. I wasn't particularly bothered that the BBC1 presenter Peter Sissons was not wearing a black tie, but his line of questioning was ill judged. Three hours after the death of Queen Elizabeth the Queen Mother, he was asking BBC reporters Nicholas Witchell and Jennie Bond whether the monarchy would be weakened as a result of her demise. (As if they would know.) He should not have twice pressed the Hon. Margaret Rhodes, the Queen Mother's niece, for details of her aunt's death. On Tuesday morning's Today programme on Radio Four, Edward Stourton suggested to Quentin Letts, the Daily Mail's parliamentary sketchwriter, that his paper was guilty of hypocrisy for criticising the BBC for what it had done itself. But there is surely a difference between asking Mrs Rhodes on air for intimate details three hours after her aunt's death, and printing such details, some of them gleaned from official briefings, two days later.
One other question needs to be cleared up. Why did Tuesday's Times and Daily Mail splash with the news that the Palace was unhappy with the BBC's coverage? Mark Damazer, the BBC's deputy head of news, said on the Today programme that the Palace had assured the BBC that it had no complaints. So did the Mail and the Times dream up their stories? No. They got them from Mark Bolland, Prince Charles's spin doctor, who always looks kindly on these papers. The BBC, by contrast, spoke to Simon Walker, the Queen's communications secretary, or one of his staff, at Buckingham Palace. His line, repeated in Wednesday's Daily Telegraph, was that the royal family was not upset. He denied the suggestion, made by the Mail and the Times, that Prince Charles had decided to give an interview to ITN because he was cheesed off with the BBC.
So where does this leave us? Mr Bolland and Mr Walker are not the best of friends. They have crossed swords before. If Mr Bolland says one thing, Mr Walker is apt to say another, and vice versa. They are spin doctors at war. But it seems to me that, however imaginative he may be, Mr Bolland is unlikely to have invented Prince Charles's fury with the BBC. Lots of people felt it, and with good cause.
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