MUMBAI: The Walt Disney Company and News Corporation have decided to call off their Asian sports broadcasting joint venture ESPN Star Sports 16 years after it was formed on the premise of exploiting opportunities together in a market that was in its infancy.

The two companies have entered into a definitive agreement under which a unit of News Corp will buy ESPN?s 50 per cent equity interest in ESS, which operates 25 television networks and three broadband networks covering 24 markets in Asia, gaining full control of the sports broadcasting entity. Disney, a powerful sports powerhouse in the US, will exit from sports in Asia.

The transaction will allow News Corp units to own and operate all of the ESS businesses while providing ESPN more independence and flexibility in future support of The Walt Disney Company?s overall efforts in Asia, the statement said.

 
 ESS will continue to be jointly managed by two companies till the transaction, which is subject to customary regulatory approvals, closes.

The buyout will also see the exit of ESS MD Manu Sawhney, who will be replaced by Peter Hutton, senior vice-president Sports of Fox International Channels.

Hutton, who has spent 20 years in the international sports television business, will report to the ESS Board.

Sawhney, who joined ESS in 1996, will be staying with the company until 31 August to work with Hutton on a smooth transition.

News Corporation Deputy COO James Murdoch said the buyout of ESPN?s stake was in line with the company?s strategy of consolidating affiliate businesses across the globe.

"News Corporation?s acquisition of the interest of ESS that we did not already own continues the program of simplifying our operating model, consolidating our affiliate ownership structures, and furthers our commitment to delivering incredible sports programming to consumers across the globe, and particularly enhancing our position in sports programming in emerging markets," Jr Murdoch stated.

ESPN President of and Disney Media Networks Co-Chairman John Skipper said the company will continue to be invested in Asia through its digital business which includes ESPNCricinfo, ESPNFC and ESPN Mobile.

"After 16 years jointly managing ESS, we have decided to independently pursue future opportunities in Asia. We are extremely proud of our role in building ESS into what it is today, and now with the growing digital landscape in Asia, we look forward to continuing to serve Asian sports fans through ESPN-branded digital businesses like ESPNCricinfo, the leading digital cricket brand in the world, ESPNFC and ESPN Mobile," Skipper said.

"Peter is a very talented sports media executive, and we believe his extensive experience in sports rights and production will serve ESS well as the business enters into a new phase of development," News Corporation Europe & Asia COO Jan Koeppen and ESPN International EVP & MD Russell Wolff said on Hutton?s appointment.

The disbandment of JV has been on the cards as the two media conglomerates have been competing against each other outside Asia. In UK, ESPN is in direct competition with News Corp-owned pay TV broadcaster BSkyB while News Corp is planning to launch a national sports network in US to take on dominant player ESPN.

Will ad rates go up for sports?

By consolidating the sports broadcasting business, Star will strive to up ad and subscription revenues to keep in line with the high acquisition prices for cricketing properties. The network strength will come into play as it inks deals with media buying agencies, cable networks and DTH service providers.

Says Vivaki Exchange VP Sejal Shah, "The ad rates for sports will surely rise."

Lodestar UN CEO Shashi Sinha feels that the move augurs well for the sports broadcasting genre.

Says Sinha, "It will help their P&L and puts Star in a comfortable position. It makes sense to bring everything under one roof. Distribution revenues will improve. At the same time, in terms of ad sales buying is done on a series to series basis regardless of how many properties a channel has. The key for me is whether Star has a common ad sales force or a separate sales force that looks at the sports business."

Mindshare?s Ravi Rao says that Star could try a clever marketing ploy by using the strength of its network. "At the same time, there will always be a demand and supply equation. The ad industry is growing at a regular rate and clients? budgets are limited. They will continue to evaluate if a property makes sense. They will see if there is a brand fit. The price of a spot will depend on the event."

Nimbus chairman Harish Thawani, however, feels that the Star-ESPN deal will not change the market dynamics as it is not a consolidation in true sense.

"It is not a consolidation as one stakeholder in a JV has bought out another. Consolidation happens when two rivals merge. Then only the benefits follow. Of course, negative consolidation can happen when a channel shuts shop like Imagine."

Platinum Media CEO Basab Datta Chowdhury feels Star will become a much more powerful network from a distribution standpoint. However, it?s not going to be easy to command a premium through consolidation as entry barrier in sports for advertisers is high.

"The price of advertisement, however, will go up if there is increase in viewership," he avers.

No matter what the media buyers may say, Star will weigh options to make gains in ad revenues from sports broadcasting.

Also Read:

ESPN, Star JV waiting to end

MUMBAI: In a major setback for Rupert Murdoch, the Culture, Media and Sport Committee of the British Parliament which is probing the phone hacking scandal at News International has ruled that the News Corp chief is ?unfit? to lead the company.

The committee in its report to the Parliament accused the media tycoon of "wilful blindness" by deliberately covering up evidence of phone hacking at his UK publishing business which eventually led to the closure of 168 year old News of the World news paper.

"On the basis of the facts and evidence before the Committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications.

"This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company," the committe said in the conclusion of its report.

Rupert Murdoch and his son James Murdoch had last week laid the blame of phone hacking on subordinates, insisting that they were unaware of the wrong doing at the News of the World.

According to reports, the verdict has divided political parties in Britian with Labour Party panel member Tom Watson saying the decision had not been unanimous, and Conservative lawmaker Louise Mensch saying the split had been along party lines.

In a press statement, News Corp.regretted the committee?s tough language terming them as regretful and partisan.

"Hard truths have emerged from the Select Committee Report: that there was serious wrongdoing at the News of the World; that our response to the wrongdoing was too slow and too defensive; and that some of our employees misled the Select Committee in 2009," the statement read.

"News Corporation regrets, however, that the Select Committee?s analysis of the factual record was followed by some commentary that we, and indeed several members of the committee, consider unjustified and highly partisan. These remarks divided the members along party lines.

"We have already confronted and have acted on the failings documented in the Report: we have conducted internal reviews of operations at newspapers in the United Kingdom and indeed around the world, far beyond anything asked of us by the Metropolitan Police; we have volunteered any evidence of apparent wrongdoing to the authorities; and, we have instituted sweeping changes in our internal controls and our compliance programs on a world-wide basis, to help ensure that nothing like this ever happens again anywhere at News Corporation.

"As we move forward, our goal is to make certain that in every corner of the globe, our company acts in a manner of which our 50,000 employees and hundreds of thousands of shareholders can be justly proud."

Meanwhile, satellite broadcaster BSkyB, which is part owned by News Corp, has asserted that is a ?fit and proper? licence holder and was engaging with the regulator Ofcom in its assessment of BSkyB?s suitability.

Ofcom is reviewing whether Rupert and James Murdoch are ?fit and proper? to hold a broadcast licence following charges of phone hacking.

MUMBAI: James Murdoch, the scion of media empire News Corporation, has distanced himself from the phone hacking scandal at UK publishing business News International by putting the blame on his subordinates who he alleged misled him on the goings-on at the now defunct News of the World tabloid.

Speaking under oath at Lord Justice Brian Leveson?s inquiry into media ethics, Murdoch alleged that the tabloid?s then-editor Colin Myler and the company?s former in-house lawyer Tom Crone misled him about the illegal activities at the tabloid.

According to Associated Press, Leveson asked Murdoch: "Can you think of a reason why Mr. Myler or Mr. Crone should keep this information from you? Was your relationship with them such that they may think: ?Well we needn?t bother him with that? or ?We better keep it from it because he?ll ask to cut out the cancer??"

"That must be it," Murdoch said. "I would say: ?Cut out the cancer,? and there was some desire to not do that."

The News Corp has been at the centre of scandal ever since it came to light that reporters at the News of the World hacked into the phones of hundreds of high-profile people, including a teenage murder victim.

The emergence of the scandal led News International to shut 168 year old News of the World on 7 July last year leading to a loss of 200 jobs.

For News Corp the implications of hacking scandal ran beyond News International as the move to up stake in UK broadcasting business BSkyB proved futile even after it got culture minister?s Jeremy Hunt to gobble up the remaining 61 per cent of Sky for ?8 billion.

Murdoch also denied the charge The Sun newspaper endorsed the Tories? election bid saying, "I would never have made that kind of a crass calculation," Murdoch said. "It just wouldn?t occur to me".

Rupert Murdoch, who is still chairman and chief executive of News International?s parent company News Corp, is scheduled to appear before the inquiry on Wednesday, AP reported.

Earlier, James Murdoch had to step down as the chairman of BSkyB, while continuing to remain on BSkyB?s board as a non-executive director. In February the Jr Murdoch stepped down as executive chairman of News International.

To firewall him from the likely impact of the scandal, News Corp had relocated him to New York headquarters as the deputy COO of the parent company.

Jr. Murdoch had last month further cut off all remaining ties with News International, the UK publishing business of News Corp, by resigning from the boards of Times Newspaper Holdings; News Corp Investments; and News International Publishers Limited.

The British media regulator Ofcom is already evaluating whether James Murdoch is ?fit and proper? to hold a broadcast licence on behalf of BSkyB. The Culture, Media and Sport Select Committee?s report into allegations of phone hacking by the end of the month.

Meanwhile, in a related development the judge Brian Leveson said British Sky Broadcasting?s Sky News channel breached criminal law by hacking into e-mails for a story, even though the investigation applied to a case on a man who faked his own death to collect insurance money.

"What you were doing wasn?t just invading somebody?s privacy, it was breaching the criminal law," Leveson said during testimony by Sky News chief John Ryley. "At the end of the day you committed a crime."

Media regulator Ofcom said on Monday it started a probe of Sky News over the e-mail hacking incident.

BSkyB said earlier this month executives at Sky News cleared a reporter to access e-mails as part of his investigations into criminal activity, including the 2008 case of a British couple who faked the husband?s death in a canoe accident to collect life and mortgage insurance.

MUMBAI: Global media conglomerate News Corporation has suspended the voting rights of a portion of Class B Common Stock owned by foreigners in order to comply with U.S law that restricts foreign holdings and voting powers to be within 25 per cent.

The company asserted that the suspension of voting rights will not impact the rights of Non-U.S. Stockholders to receive dividends and distributions.

The decision to curtail voting rights was taken as the company discovered that foreign investors held a total of 36 per cent Class B Common Stock well above the permissible limit. The voting rights of 50 per cent of the Class B Common Stock held by Non-U.S. Stockholders was suspended immediately.

The remedial measure comes as the company, which owns and operates the popular Fox network channels, seeks to renew licenses for its 27 TV stations.

The company‘s 27 owned-and-operated stations and the Fox Broadcasting Company together generated $4.8 billion in revenue and $681 million in operating profit in fiscal 2011.

Accordingly, after the suspension of voting rights, the aggregate percentage vote of the Murdoch Family Interests will remain initially at 39.7 per cent of the outstanding shares of Class B Common Stock not subject to the suspension of voting rights.

According to Wall Street Journal, News Corp.‘s largest foreign investor is Saudi prince Alwaleed bin Talal, who has about 7 per cent of the voting stock.

Station owners are required to file biannual reports to the FCC that provide information on ownership interests, including foreign owners with a significant stake.

The disclosure comes in the backdrop of the multiple scandals that rocked the company in UK. Television regulator Ofcom is scrutinising whether James Murdoch and News Corp. are "fit and proper" persons to be in control of BSkyB, the company that runs Sky TV.

MUMBAI: It was a day of double whammy for media conglomerate News Corp as British lawyer Mark Lewis, who has been pursuing the phone hacking scandal, said that he planned to take the case to United States, the centre of Murdoch?s global media empire.

However, the bigger threat for Murdoch comes from a British Parliamentary report into a phone hacking scandal which may lead eventually to News Corp being forced into cutting or selling its stake in the highly profitable pay-TV firm BSkyB, according to newswire Reuters.

Lewis said he would take legal action on behalf of three people which includes two sportsperson and an American citizen.

?The News of the World had thousands of people they hacked. Some of them were in America at the time, either traveling or resident there," he said.

Lewis?s clients also include the family of Milly Dowler, an abducted teenager who was murdered in 2002, and whose voice mail was said to have been hacked after she disappeared.

Coming back to the Parliamentary panel?s report on the hacking scandal, the Reuters report says that the Parliament?s culture committee is widely expected to criticise News Corp in its long-awaited report.

The report also says that the panel?s criticism could raise possibilities that the British broadcast watchdog Ofcom will take action against Rupert Murdoch?s media conglomerate.

The culture select committee could publish its findings and recommendations into the scandal by the end of April to which the government must respond within two months.

Ofcom is already conducting its own investigation into News Corp and BSkyB?s directors to ensure that directors of TV companies are "fit and proper" to hold a broadcast licence.

Earlier this month, James Murdoch had stepped down as the chairman of BSkyB. However, he continues to remain a board member. In February, the Jr Murdoch had stepped down as executive chairman of News International that is being probed by UK authorities for phone hacking surrounding its now defunct News of the World paper.

MUMBAI: Under fire over the phone hacking scandal, James Murdoch is likely to step down as the chairman of News Corp?s British sports broadcasting business unit, BSkyB, according to a report by Sky News.

Quoting unidentified sources, the news broadcaster said Murdoch was due to attend a board meeting on Tuesday and is expected to stand down from his position as chairman with immediate effect.

BSkyB?s senior non-executive director Nick Ferguson is tipped to replace Jr Murdoch, who will continue to remain on BSkyB?s board as a non-executive director.

It was only in February that the Jr Murdoch stepped down as executive chairman of News International that is being probed by UK authorities for phone hacking surrounding its now defunct News of the World paper. Jr. Murdoch, though, has denied any knowledge of wrongdoing by the News of the World staff, a claim that hasn?t cut much ice.

To firewall him from the likely impact of the scandal, News Corp had relocated him to New York headquarters as the deputy COO of the parent company.

Jr. Murdoch had last month further cut off all remaining ties with News International, the UK publishing business of News Corp, by resigning from the boards of Times Newspaper Holdings; News Corp Investments; and News International Publishers Limited.

More importantly, the decision to step down from BSkyB comes ahead of Culture, Media and Sport Select Committee?s report into allegations of phone hacking by the end of the month. James is also expected to appear before the Leveson Inquiry into media ethics with his father Rupert Murdoch at the end of the month.

The British media regulator Ofcom is already evaluating whether James Murdoch is ?fit and proper? to hold a broadcast license on behalf of BSkyB.