BEVERLY HILLS, Calif. -- News Corp. Ltd. Chairman Rupert Murdoch on Wednesday said his company's long pursuit to buy DirecTV was now a matter of money and he threw the question back to the U.S. television service's owners, Hughes Electronics, and its parent, General Motors.
"It's just a question of price," Murdoch told Reuters after speaking at the Milken Institute Global Conference here. But the executive, who is known on Wall Street as a wily dealmaker, quickly added. "They may decide to hold it."
Murdoch's statements came one day after telecommunications provider SBC Communications broke off talks with DirecTV parent Hughes Electronics Corp., sources familiar with the discussions said. Hughes is a wholly owned subsidiary of GM.
That left News Corp., which already has interests in Fox film and TV properties in the United States, British Sky Broadcasting in Britain and various Sky-branded and TV operations in Asia and Europe, the apparent lone bidder for DirecTV.
A deal to acquire DirecTV is particularly important to News Corp. because it would give the company a satellite distribution outlet in the United States, the world's No. 1 media market.
Moreover, an acquisition would make News a global TV distributor for its content-producing companies such as the 20th Century Fox film studio, 20th Century Fox television, Fox Broadcasting and other divisions in the Fox Entertainment Group Inc. stable.
Sources familiar with the situation told Reuters an offer by News Corp. may come by late this week, but Murdoch said he had "no idea" on the timing or the price of any formal bid.
"We may not make one yet, it depends what their 'asks' are," he said, referring to DirecTV's asking price.
But the price issue is complicated by several factors that include whether News Corp. would buy all of DirecTV or only a controlling interest.
BACK ON THE BLOCK
DirecTV was put back on the sales block earlier this year when rival satellite TV service EchoStar Communications Corp. ended a more-than-year-long effort to acquire the company after running into U.S. regulatory problems.
SBC entered the bidding shortly thereafter, but talks between it and DirecTV broke down this week over differences in the structure of a deal, leaving News Corp. apparently the only interested party, sources said.
"It appears to be an uncontested bid for DirecTV. At this stage, you'd have to say that GM really doesn't have too many options, despite their apparent unwillingness to sell to News Corp.," Scott Maddocks, fund manager at BT Financial Group in Sydney, told Reuters.
But Murdoch said he was uncertain whether News Corp. was the sole bidder. There has been speculation that New York-based Cablevision Systems Corp.
News Corp. had tried to buy DirecTV before EchoStar outbid it, and has pursued the company for several years.
DirecTV, with just over 11.2 million subscribers at the end of 2002, has been one of Hughes' primary growth engines. In the fourth quarter of 2002, DirecTV saw its revenues climb over 19 percent from the previous year to $1.8 billion.
Quarterly earnings before interest, taxes, depreciation and amortization, EBITDA, more than tripled to $191 million. EBITDA is a common financial measure for media companies.