A Fox-Time Warner deal would give Murdoch new heft in China
By Ronald Grover
(Reuters) - Rupert Murdoch's plan to buy Time Warner would help the Twenty-First Century Fox chairman make larger inroads in China, a fast-growing market that media moguls are finding hard to crack.
Time Warner's board rejected Murdoch's $80 billion offer, but the Fox chairman is expected to continue the chase.
A deal would create a giant with more than $37 billion a year in revenues in the United States and Canada. It would also nearly double the revenues Fox generates from the emerging media markets in Latin America and Asia/Pacific.
"He sees 3 billion new consumers coming into the market and a rising middle class in China and India, and mobile devices and strong demand for content," said Mario Gabelli, the CEO of GAMCO Investors, in an interview with Reuters Insider, "He's going to be able to create Netflixes of his own."
Gabelli owns shares of both Fox and Time Warner.
Last year, Fox generated 42 percent of its revenue outside the United States and Canada. The company's Asian revenues, including those in Japan and China, grew by 40 percent, to $2.1 billion, over two years.
Time Warner's collection of cable channels would complement Fox's programming in key territories.
In Latin America, where Fox faces off against large local players, Time Warner's Turner unit operates Chilevision, a large broadcaster in Chile, and also shows its TNT entertainment channel, Cartoon Network and locally tailored regional channels such as the kids channel Tooncast. Continued...