While many in the media are still digesting the news that 21st Century Fox - for which read the Murdoch mafiosi - has made an offer for the 61% of Sky that it does not already own, and that this has been agreed by the Sky board, few are as yet asking what makes the deal so worthwhile. What’s in it for the directors that made them give the green light to Creepy Uncle Rupe and his humourless henchmen?
Moreover, what’s in it for Murdoch himself, apart from the satisfaction of completing a vindictive pursuit of the prize denied him when the mildly inconvenient fact that he was overseeing, in the late and not at all lamented Screws, a borderline criminal enterprise was brought to public notice by those terribly bad sports at the deeply subversive Guardian? As with so much else, it all comes down to money. Rather a lot of it. For everyone.
Murdoch would have had to pay over £8.50 a share for the 61% of Sky back in 2011. He’s offering £10.75 now. But thanks to the vote to leave the EU (which he wanted), and the subsequent tanking of Sterling, he gets a 14% discount as the currency had gone down the chute. Plus Sky shares have been on the slide all year, having been around £11 each in January, but only £7.50 before the bid was announced.
Added to that, the Murdochs have plenty of dosh to chuck around, and had even stopped buying Fox shares back. Plus there is growing competition in the USA from Netflix and Amazon, and adding Sky will put an extra 60% on the Fox revenue stream. And while some investors are pushing for Sky’s board to demand the Murdochs open their wallets a little wider, the directors may have been distracted by prospects of enrichment.
How much enrichment? Put it this way, Sky’s two top executives, CEO Jeremy Darroch and Andrew Griffith, who is finance director and COO, are in line for a payout of around £40 million. How so? “Darroch has rights to just over 2.2m shares in Sky under long-term bonus agreements while Griffith has rights to 1.3m. This means Darroch could secure an award of £24.5m, while Griffith’s would be worth £13.7m, less tax and other deductions”.
Darroch is not exactly short of a few bob: “In addition, Darroch owns 689,871 shares worth £7.4m and Griffith holds 172,445 shares worth more than £1.9m … Darroch, 54, has earned £68m in pay and other benefits since he took up the position of chief executive in 2007, when he replaced James Murdoch”. And who was reappointed Chairman of Sky last April, just in time for him to arrange everything? Why, James Murdoch, of course.
So a few shareholders are unhappy that they aren’t making even more money. The Murdochs should worry. The top men are looking at a bumper payday. The Government will do whatever it can to keep the favourable coverage coming. The only way this bid is going to be successfully derailed is either by competition authorities with real teeth doing their job - which by definition means that it will be the EU’s job, and not ours, or another rash of scandals coming back to bite the Murdoch mafiosi where it hurts.
Here’s hoping it turns out to be 2011 all over again. The Murdochs deserve no less.