The bleeding continues in the Murdoch clan’s empire. Last Friday, we told you of the near-25% slide in the value of News Corp’s most important component, the 61% News Corp-owned REA Group, the online property website. That’s because Australian investors feel the local property boom is entering dangerous waters (especially in apartments in Sydney, Melbourne and Brisbane). It also reflects investor thinking that the biggest group of assets in News Corp — the News and Information Services operation (mostly papers in Australia, the US and UK) — is worthless with no value or future whatsoever.
But on Friday the shares in Murdoch’s 38%-owned Sky Plc hit a three-year low. They fell 2.2% on Friday to take the fall this year to a smidge under 30% or 3.9 billion pounds. The Murdochs’ 21st Century Fox owns 39.1% of Sky and have long been seen as a buyer (they had a crack back in 2011 but that was derailed by the News of the World phone-hacking scandal.
The odd rumour of a new interest in mopping up Sky has failed to arrest the gradual slide in the company’s share price, which is a bit odd given its strong profitability and subscriber numbers. What is bedevilling the stock is falling viewer numbers for the English premier League soccer since August when the 2016-17 season started, the higher cost of the new broadcast contract, the growth in competition from rival BT, and the feeling that Sky (and BT) have overpaid for their new contracts, and could be forced to again pay too much when the new broadcast contract is negotiated in 2018. — Glenn Dyer
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