This was published 8 years ago
Rupert Murdoch's News Corp hits stalemate with Nine Entertainment over Sky News
By Dominic White
Nine Entertainment Co has decided to hold onto its 33 per cent shareholding in Sky News' parent company, leaving the pay TV channel facing an uncertain future.
Fairfax Media has learned that Nine has hardened its stance on keeping its stake in Australian News Channel (ANC) after a number of buyout offers made by News Corp, which began negotiations over a year ago with an offer of around $25 million.
The other two-thirds of ANC are shared between Seven West Media and Britain's Sky, which, is 39.3 per cent owned by News Corp's sister company 21st Century Fox.
The value of Sky News, which is 20 years old and employs more than 200 staff, depends to a large extent on its carriage deal with Foxtel, which expires in December 2017.
Some sources believe that if the stalemate continues, Foxtel will let the contract expire and that News Corp, which owns half of Foxtel, will launch its own-branded pay TV news channel.
However, it is understood that there are no active discussions at News Corp about launching its own news channel at present.
The ANC joint venture now has to negotiate with Foxtel's new chief executive Peter Tonagh, who was previously leading negotiations to buy Nine's stake in ANC in his former role as chief executive of News Corp Australia.
As the end date of the contract approaches the value of the business is diminishing, which had given all sides an incentive to discuss whether to continue investing in the business or sell out.
Former Nine chief executive David Gyngell had been open to a sale of Nine's stake at the right price, with negotiations over a sale being led by Nine's former chief operating officer Simon Kelly.
But sources say the broadcaster has hardened its position under its new chief executive Hugh Marks.
News Corp is known to see Sky News as a natural fit for its other businesses in Australia: its titles such as The Daily Telegraph in Sydney and the Herald Sun in Melbourne have websites that increasingly integrate video content.