At 80 Murdoch looks to take over BSkyB

12 Mar 2011

Media mogul Rupert Murdoch turned 80 on Friday with little fanfare. He is now the fourth oldest chief executive in the S&P 500, as he prepares to negotiate the terms of the biggest deal in a career that has spanned nearly six decades after he inherited the Adelaide News from his father in 1953.

According to analysts, News Corp shares are subject to a "Murdoch discount" against other media stocks, because of the fear that its largest shareholder may at any time commit shareholders' capital to unexpected deals such as MySpace or Dow Jones.

The company's shares are down 24.5 per cent since May 2007, when the News Corp chairman and chief executive announced his $5.7 billion bid for Dow Jones, owner of The Wall Street Journal even as the Thomson Reuters index of world media stocks was down 15 per cent in the same period.

Though News Corp's shares picked up after it made an approach to BSkyB, and Murdoch has bought stock recently, its returns are down 22.1 per cent since 2007, while in case of CBS, Time Warner and others buybacks have limited the sector's decline to a 7 per cent fall.

News Corp has averaged compound annual growth rates of 1 per cent since Murdoch's 70th birthday even as the media sector has slipped 0.4 per  cent a year, but the returns pale as compared with Murdoch's seventh decade when News Corp's growth averaged 32 per cent double the sector rate before th dot com bust.

Between 50 and 60 he also also beat his peers with compound annual growth of 17.3 per cent, compared with the sector's 16 per cent rate. According to analysts, though, financial returns do not quite capture the media mogul's expansionary zeal.