No one has accused Rupert Murdoch of insanity, and the News Corp. chairman
insisted Thursday that he would have to be crazy to use control of DirecTV Inc. to hammer
competing TV distributors and programmers, as his critics have predicted.
"It would be madness," he told the House Judiciary Committee during a hearing
on plans to acquire control of the satellite broadcaster.
Denying rival direct-broadcast satellite provider EchoStar Communications Corp. Fox owned-and-operated stations, for example, would cost him
$400 million in annual ad revenue, he said.
"As a programmer, News Corp.'s business model is predicated on achieving
widest possible distribution for our programming in order to maximize
advertising revenue and subscriber fees," he added. "Any diminution in
distribution reduces our ability to maximize profit from that programming. It
makes no business sense for either party to do anything to limit our potential
customer base or our programming possibilities."
As for predictions that he will jack up the cost of Fox News Channel to $2 per
subscriber, he said cable systems and EchoStar would have sufficient power to
reject his programming if charges are too high for customers to stomach.
"I don't think it's as easy at that," Murdoch said. "There are many customers
who enjoy many kinds of things" and don't view Fox programming as so essential
that they'll pay any price.
Also, DirecTV has only 12 million viewers, not enough to support a channel on
As a condition for government approval of his $6.6 billion bid to gain a 30
percent stake and voting control of DirecTV, Murdoch has pledged not to
discriminate against rival distributors and programmers.
His promise isn't swaying critics.
"You haven't done much to alleviate my concerns," said Rep. Rick Boucher
(D-Va.), after Murdoch rejected his calls to keep the nondiscrimination
condition even if cable-nondiscrimination rules one day expire and to waive
retransmission fees for Fox O&Os.