Rupert Murdoch is the controlling force behind both Sky and 21st Century Fox, the New York-based company that owns a 39.1% stake in the satellite broadcaster. But the true scale of his media empire is even more expansive.
Fox acquired the Sky stake after Murdoch split his businesses in 2013 in the wake of the phone-hacking scandal that prompted the closure of the News of the World.
Fox is home to 20th Century Fox, the film and television production studio responsible for the X-Men franchise and the Simpsons.
The organisation’s cable network programming division includes Fox TV and Fox News, which some critics say helped get Donald Trump elected president. Like other rolling news stations such as CNN, Fox News carried many of Trump’s campaign rallies live and unedited, giving him free publicity worth tens of millions of dollars.
Shares in Fox have been largely flat this year and the company is valued at $52bn (£41bn).
Sky is listed under “direct broadcast and satellite TV” on the 21st Century Fox website, owing to the group’s existing stake in the broadcaster. Following a near-£5bn deal in 2014 to unite ownership of Sky’s four European businesses, the company now has 22 million customers in the UK, Ireland, Germany, Austria and Italy.
The site states: “Sky has annual revenues of over £11bn and is Europe’s leading investor in television content with a combined programming budget of £4.9bn.”
Sky’s deal with the US cable network HBO for the exclusive rights to shows such as Game of Thrones has helped attract and retain customers. The bloodthirsty drama is shown on Sky Atlantic, a channel only available on the Sky platform in the UK as the company is not legally compelled to make it available to its pay TV competitor Virgin Media – unlike its sport and movie channels.
Each episode of the most recent Game of Thrones series exceeded 5 million viewers, including viewing on the catch-up platform Sky Go and pay-as-you-go service Now TV, making it Sky’s most-watched show to date.
But Sky is best known for its pay-TV offering that is primarily delivered by satellite to millions of homes across Europe. The bedrock of the business is live sport, primarily football such as the Premier League, the rights for which Sky has paid £4.2bn for the three years from 2016/17.
Sky also has millions of broadband and fixed-line telephone customers, making it one of the UK’s biggest internet service providers, and recently said it would also start offering mobile services as well. There have been concerns raised in the past over whether companies that provide internet content and internet access should be owned by the same organisation.
For the year to 30 June, Sky’s total revenues rose by 7% to almost £12bn, with the UK and Ireland business posting a 7% rise to more than £8bn for the first time. Full-year operating profit rose 12% to a record £1.56bn.
While operating profit at Fox for the year to 30 June rose slightly to $6.6bn, the profits at Murdoch’s other company, News Corp, are not quite in the same league.
The business that owns his newspapers in the UK (the Sun, the Times), the US (the Wall Street Journal, the New York Post) and Australia, as well as property websites and the publisher Harper Collins, posted a 28% fall in annual pre-tax profit to $684m.
Higher profits from the real estate sites in Australia and the US have helped offset falling returns from the newspapers as advertisers increasingly move online and people stop buying papers. This week News Corp Australia said it was making 42 journalists redundant as part of a cost-cutting drive.
The £11.25bn that Murdoch is willing to pay to take full control of Sky underlines the fact that the future of his empire lies firmly with the big and small screen rather than the printed word, despite the 85-year-old’s longstanding commitment to newspapers.
