Veteran television executive Jim Blomfield has been named CEO of dominant Australian pay-TV outfit Foxtel replacing Tom Mockridge who is to head up the joint venture between News Corp's Star TV and Cable & Wireless HKT in Hong Kong.
In recent years Blomfield has been working on the commercial television aspirations of News Ltd, one of the three owners of Foxtel.
News of Mockridge's appointment as CEO of Star TV-HKT has partially dispelled rumours that Rupert Murdoch would be a reluctant partner to his former rival Hong Kong magnate Richard Li whose Pacific Century CyberWorks acquired Cable & Wireless HKT for $38bn last week.
News Corp originally backed Singapore Telecommunications' bid to acquire Cable & Wireless HKT. When Li wrested control of HKT's shares, some industry analysts asked if Murdoch would proceed with the digital TV venture, and whether Li would honour the original deal signed between HKT and Star TV, particularly as News Corp is striving to match its TV and print media domain in Asia with a sizeable Internet presence.
However, last week, Murdoch's youngest son James confirmed News Corp's commitment to the service when he met with Li. And in an interview, Bruce Churchill, Star TV's deputy CEO stated: "With human resources as scarce as they are, we would not be committing such a valuable executive to this venture if we didn't feel it's the future for us."
The joint venture, announced last November, promises to offer 50 channels of entertainment programming, news, sports, home shopping, and high-speed Internet access to its Hong Kong and southern China subscribers. The content will be delivered via HKT's landlines and through an interactive, direct-to-home digital transmission system developed by Star TV.
Meanwhile, the continuing upward movement of News Corp's share price has made it the first Australian company to be valued at A$100bn and was responsible for the Australian Stock Exchange registering three consecutive record closes late last week.
Most Australian commentators are attributing News Corp's rise to the investment community's rethink on the value of its global satellite businesses in the wake of the AOL/Time Warner merger, and the possibility that they may be floated off separately or teamed with an Internet company. News Corp has just about doubled its capitalisation in four months and now accounts for about 16% of the All Ordinaries Index. This is in stark contrast to many traditional blue chip companies, which have lost investor support and market value.
The media is also marvelling at the scrabble for stock by local fund managers who have traditionally been reluctant investors and have now found themselves being outperformed by the market. Enormous speculation continues about just how high News Corp can go. The Australian Financial Review notes that News has traded at one to two times its revenue traditionally. Now, at A$27 per share, it is trading at five times its revenue. Popular Internet stocks in the US are trading at up to 50 times their revenue.
The front and financial pages of Australia's weekend newspapers were also crammed with news about telecommunications giant Telstra, Australia's biggest company up until News Corp's big surge, because of news that it is considering buying Kerry Packer's listed company Publishing and Broadcasting Ltd (PBL). With Telstra 50% owned by the Australian Government, the implications of such a deal, had it happened, would have been that Packer's high-rating, commercially-cut-throat Nine Network would have ended up in public hands - at least in theory.
The focus of speculation about Telstra's need for content has now swung onto Kerry Stokes' Seven Network and publishing company John Fairfax Holdings, causing their share prices to rise. Telstra owns half of subscription television service Foxtel, alongside News Ltd and PBL.