For Broadcast Feb 2001

It's definitely a job for the Mighty Morphin Power Rangers. Mr Rupert Murdoch, their co-owner, needs their super powers to get his News Corp. out of his latest end-of-reel drama. Snatching victory from the jaws of defeat is a Murdoch USP, but even this self-style media super hero needs to switch his phasers from stun and up to kill in order to beat off the company-consuming market forces that are blasting away at everything from the dotcoms to traditional media players.

The first job has already been done Ð the Mighty Murdoch has scaled back on his Internet investments. Next up for MM is to figure out how to buy out his erstwhile partner of 50% of Fox Family Worldwide that owns those Power Rangers. Meanwhile, in another part of the Empire, he must re-structure his Master Plan to form a traded holding company for his global satellite TV interests.

It's not as if this three-part drama for Murdoch is a unique story. The Dark Forces of a bear market are creating similar machinations in many media companies throughout the world. The stage was set last year when the dot.com bubble burst, which zapped over-hyped dot.coms, but also has weighed on the fortunes of media titans. News Corp. ended its $1 billion alliance with online health network MDWeb, incurring a loss of more than $200 million. News Corp., NBC, CNN and Disney have all cut on-line staffs hired in the frenzied days when everyone was racing to get on-line anyway, anyhow. Disney CEO Michael Eisner has closed down Go.com, Disney's portal business that always had the wrong name, proving that even "brand-leaders" like Disney can make Mickey Mouse decisions, and he has also has dumped the company's online tracking stock, Disney Internet Group.

Another fallout of a more ebullient time are share deals signed when the only direction the market seemed to be going was up. Saban Entertainment has decided before Christmas to exercise an option that requires News Corp. to buy out its half-stake in Fox Family Worldwide. Saban wants $2 billion for it, but even Mighty Murdoch may have trouble finding that much cash, particularly in the wake of a Standard & Poor's Report that raised the possibility of downgrading News Corp's credit to a junk bond rating if it increases its debt.

News Corp isn't the only company feeling the share option pinch. Apart from a host of other problems, including improper share dealing by executives and miscalculating financial results, Germany's EM.TV, the owner of The Muppet Show, also faces having to make good on an option held by Formula One chief Bernie Ecclestone that, if exercised, would force EM.TV to buy another 25% of the company that owns Formula One car racing. But EM.TV doesn't have the money. Its stock has fallen some 90% since late last year driving the German company to look for others to bail it out.

The bear market has also put Mr Murdoch's Master Satellite TV plan on the defensive. His proposed $40 billion IPO of Sky Global Networks, including News Corp.'s stakes in BSkyB and Star TV in Hong Kong, is taking a back seat to securing a deal to buy US satellite TV operator DirecTV. DirecTV's owner Hughes Electronics, part of General Motors, will likely want $40 to $50 billion in cash for control of the company that counts more than 10 million subscribers in the US and Latin America. It's a big prize, and one that intrigues Mr Murdoch, who has wanted for years to supplement his US terrestrial Fox TV network with a direct-to-home broadcaster. But big deals take big firepower.