News Corp in 2005: Consolidating the DirecTV Acquisition


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Case Details:

Case Code : BSTA003
Case Length : 13 Pages
Period : 2003 - 2005
Pub Date : 2005
Teaching Note :Not Available
Organization : News Corp
Industry : Media
Countries : Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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DirecTV is important to News Corp. because it provides the missing link in News Corp's network of satellite TV platforms around the world

- Rupert Murdoch1

Introduction

Rupert Murdoch, (Murdoch), News Corp's Chairman, seemed to be on top of the world in early 2005. With the successful acquisition of DirecTV, Murdoch's dreams of building a content and distribution empire were coming true. With savvy investments in Internet technologies, quality content and a strong hold on distribution, News Corp looked like an invincible media powerhouse at the end of 2004. This optimism was reflected in Murdoch's own words2 "Our satellite platforms now span four continents, and we have more than 26 million subscribers. What that network of platforms gives us is, I believe, the perfect balance of assets for any media company: We have a great mix of subscription and advertising revenue, as well as a great mix of content and distribution businesses -- (and) we're spread geographically in a way no other media company in the world can match".

Background Note

The DirecTV acquisition seemed to mark a turning point for Murdoch. DirecTV's roots went back to 1932, when Hughes Aircraft was set up to build experimental airplanes for Howard Hughes (Hughes). During World War II, the company began building a mammoth flying boat to serve as a troop carrier.

After the war, the company entered the growing defense electronics field. In 1953, it underwent a major shake-up when about 80 of its top engineers walked out, dissatisfied with Hughes, who was becoming distant and difficult to deal with. The US Air Force also threatened to cancel the company's contracts because of Hughes' erratic behavior...

Excerpts >>



1] Murdoch, Rupert. "News Corp,"www.hollywoodreporter.com, 22nd June 2004.
2] ibid.

 

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