Monday, 13 September 2010

BskyB and NewsCorp
FT alphaville today highlights the 'competition commission concerns', which unsurprisingly a competitor supports. To take the liberty of summarizing the concerns; Sky + Times + The Sun = unstoppable control of the UK media, however the article says this is because of the ability to cross market titles and spend on marketing, neglecting more crucially the importance of how NewsCorp have really won the content war. The fact that the Times has a paywall when no other main stream newspaper does, or that Sky's pay TV model is dominant is the key issue, not spend on marketing or cross selling. These products are superior. Arguing against the deal because of competition concerns seems weak and definitely not as solid ground as the real reason that shareholders should be voting against the NewsCorp bid for BskyB, VALUATION. Taking 700p for an asset worth at least 1000p on a standalone basis would be absurd.

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