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News Corporation By Team Vivaldi Spring 2008

News Corporation By Team Vivaldi Spring 2008. MGT 693 Class 18571 Professor Degravel Case Study Presentation Team Vivaldi. News Corporation. Founded in a small Australian town in 1952 Impressive media and entertainment company with broadest global presence

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News Corporation By Team Vivaldi Spring 2008

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  1. News CorporationByTeam VivaldiSpring 2008 MGT 693Class 18571Professor DegravelCase Study PresentationTeam Vivaldi

  2. News Corporation Founded in a small Australian town in 1952 Impressive media and entertainment company with broadest global presence Major assets include newspaper businesses, film and television production, major television channels, television stations, and book/magazine publishing

  3. Issue News corporation is trying to acquire DirecTV, the dominant provider of satellite television service in the United States EchoStar, the second-largest satellite provider in the U.S, increased its offer to buy DirecTV to more than $26 billion VS

  4. Strategic Logic of Acquiring DirecTV Expanding dominant satellite distribution networks BSkyS in Europe and Star in Asia No distribution presence in the U.S DirecTV considered as “transforming acquisition” Establishes distribution presence of News Corporation in the U.S. Diversify News Corporations’ revenue stream

  5. Benefits from the DirecTV Acquisition • DirecTV with Sky Global linkup • Access to cheaper programming and advanced technology at the Murdoch controlled BSkyB • Have with Sky Global’s satellite holdings and technology companies • Acquiring DirecTV • BSkyB’s expertise in customer management could be leveraged into DirecTV’s operations • Diversify News’ revenue stream in the U.S. beyond the advertising market • Obtain some synergies from common purchasing of set-top boxes and programming • Monetize some of News Corporations’ unlisted assets such as STAR.

  6. Corporate Strategy • Multinational • Diversified across multiple products • Vertically integrated

  7. Corporate Strategy • Multinational • Major TV channels are in three continents and dozens of countries • Newspapers owned in U.S., United kingdom, Australia, New Zealand, Fiji, and Papua New Guinea • Diversified across multiple products • Major assets include newspaper businesses, film and TV production, TV channels, TV stations, and book/magazine publishing

  8. Corporate Strategy • Vertical integration strategy • Film Studios • TV Networks • Cable / pay TV platforms

  9. Themes and Patterns • News Corporation has been systematically engaged in the building of a geographically dispersed assets base through direct foreign investment, strategic partnerships, and mergers and acquisitions • U.S. entry into film and broadcasting via acquisition • News Corporation’s globalization strategy has also been marked by the significant role played byjoint ventures and strategic partnerships in investments outside its home bases of the United States, Australia, and Britain • Investment in Asia and Latin America

  10. Weaknesses of Approach • Expanding too fast • Stepping on toes • Way too diversified • Bad timing

  11. Risks Impacting News Core Strategies • Murdoch spent $75 million on Satellite TV • Sky and BSB merger • In 1992 BSkyB was acquired for $465 to increase subscribers • Paid premiums • Decisions were made too quickly • No business planning department

  12. Deteriorating Core Assets Network Television Need content and distribution Newspapers Shrinking advertising revenues

  13. SWOT Analysis

  14. Alternative Actions • Achieve greater economies • Scale—increasing output for a single product • Content • Scope—increasing output across multiple products • Distribution • Intensify hit show development • Establish distribution presence

  15. Recommendations • Leverage Twentieth Century Fox movie creation • Heart of media industry • Gain competency in TV show development • Original programming vital (re-run revenue vs. brand) • Become more profitable with age (capital expenses decrease and syndication revenues increase) • EoSca&Sco—acquire more stations and consolidate • Operating margins increased (10%) • Tap new business technology—Internet • Acquire satellite capability or create joint venture in cable network infrastructure • Distribution presence

  16. Societal Costs • Few major conglomerates create less competition • Individuals have less options • Monopoly • Media bias • Filtered newsworthiness • Homogenized news reporting • Media spin

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