By Richard Agnew
The media mogul is under pressure, but don’t write him off. AS Rupert Murdoch has found out in recent weeks, when it rains, it pours. The world's most powerful media mogul must be wondering where lady luck went, as in the space of a few days every thing that could have gone wrong did go wrong. But just how serious are Murdoch's woes?
Murdoch’s challenge|~||~||~|The media mogul is under pressure, but don’t write him off.
AS Rupert Murdoch has found out in recent weeks, when it rains, it pours. The world's most powerful media mogul must be wondering where lady luck went, as in the space of a few days every thing that could have gone wrong did go wrong. But just how serious are Murdoch's woes?
On the face of it, the pressure is piling up. His News Corporation has increased its stake in satellite broadcaster British Sky Broadcasting from 37% to 39%, just at a time when BSkyB is entering choppy waters. Many BSkyB shareholders have openly said they don't want to see Murdoch take a bigger share of the company. More worryingly, the churn rate — the number of subscribers leaving BSkyB each year — is at its highest for several years, at 11%. This coincides with the share price being at its lowest for five years, with the company's market value now down to US$18 billion. With the cable rivals finally getting their act together, staying ahead of the competition will be tougher and costlier than ever. But its not just BSkyB where Murdoch faces problems.
His News Corporation has invested over US$1 billion on internet companies since July this year. It is Murdoch's second attempt to make a serious play for the internet market, and a move that has been described as “panic buying" by the respected advertising boss of WPP, Sir Martin Sorrell. And there are other reasons to panic: At his British tabloid newspaper The Sun, sales have been slipping fast, and the paper's editor, Rebekah Wade, spent a night behind bars after being arrested for attempted assault.
Last, but not least, the lingering question of succession has been rearing its ugly head again. Many investors are uneasy that Murdoch's son, James, is being touted as a future boss of News Corporation, and Murdoch's assurances that family connections will make no difference have been treated with derision. But it would be wrong to write him off. After all, Murdoch once bet his entire empire on BSkyB and came up trumps. In the face of adversity, he usually triumphs. The chances are he will again.
||**||Here he comes|~||~||~|NEXT WEEK sees the arrival of Sir Richard Branson is Dubai, to open one of the world's biggest Virgin Megastores, at the Mall of the Emirates. The Virgin boss will make a dramatic entrance down the new ski slope at the mall. But his entrance into the Dubai business market promises to be even more spectacular: in March next year Virgin Atlantic will begin regular flights between London and Dubai.
Other Virgin products, including financial services and leisure, are also being considered. Whichever industry Branson delves into is bound to prove a wake-up call for competitors. The Virgin brand is known for many things: competitive prices and quality high among them. But it is customer service where Virgin always leads the way.
His arrival may cause a stir, and may force rivals to take a look in the mirror. But the end result can only be positive for the entire Middle East. We look forward to, and warmly welcome, his arrival in Dubai.
||**||Banking on Bahrain|~||~||~|THERE APPEARS to be no stopping Emaar boss Mohammed Alabbar. Most of us know of him as one of the world's leading property developers: the record profits and growth at Emaar are proof of that. But over the past year, Alabbar has slowly and surely started conquering the banking industry.
In May this year, Al Salam Bank — chaired by Alabbar and part-owned by Emaar — was launched in Sudan. It has already become a success and looks set to play a key role in the Islamic banking market.
Last week, Alabbar met with the Crowm Prince of the Kingdom of Bahrain, His Highness Sheikh Salman Bin Hamad Al Khalifa. Al Salam Bank is launching in Bahrain, capitalised at nearly US$300 million. Entering the Bahrain financial market is a brave move, with many challenges. But if Alabbar's success in Sudan is anything to go buy, success is all but guaranteed.||**||