The essence of smart business is being an astute trader at the right time.
The big manufacturers know when to pass from buyer to seller, going from offense to defense. Only Rupert Murdoch, founder and patriarch, could have decisively executed the vast $ 66 billion deal of News Corp with Disney.
His decision is motivated by many factors, but says a lot about the general and collective disintermediation influence in the media sector. Silicon Valley giants such as Amazon, Google, Facebook and Netflix have devoured audiences and readers at an alarming rate, directly under the corporate aegis of large traditional media companies, such as television networks and newspaper publishers.
the former director of News Corp told me that Murdoch had one of the most acute minds for the strategic value of his media properties against other competitors.
While I tended to overpay for the objectives, I usually succeeded. He was a skillful acquirer, showing determination and patience as he did with his long search for Time Warner until he decided to finish it in 2014.
When companies like Google or Facebook, initiated by graduate students or students who drop out of college, can challenge that endangers life, even media moguls must reorganize and put themselves on the defensive.
The imagination and audacity of the media has shifted towards new and large technology companies that are looking for new models to detoxify the old newspaper titans and old business models.
Do you remember the old media world? It helps if you think of journalists as silly opportunists, afflicted with mediocre education and worse ways. The editors have to treat them with mild disdain to stay on top of them. News Corp. owned South China Morning Post until its sale in 1993.
In the past, all media value was piling up for the publisher, while hapless journalists worked hard and whined about low wages. Few realized that their only hope of making money was to build their own multimedia asset.
Then, the Internet and the video in real time exploded, and all the value was diverted almost immediately from the editor to the aggregator. That Google and Facebook control more than 70 percent of new online advertising around the world, while not paying for content, is one of the great revolutions of the publishing history; right there with the invention of the printing press.
The old media titans tried to recover, but the technology was too powerful and popular with consumers. Murdoch even bought MySpace in a desperate rearguard action, but it was too late to reject Facebook.
Some experts think Murdoch's family situation is similar to King Lear . I think it's more like the dilemma of Don Corleone in The Godfather .
The sponsor knows that he must plan the succession in a turbulent world. Each of his adult children has one of the key features of his character: wisdom, cruelty, kindness and cunning, but none of them combines: it is necessary to survive and triumph in a treacherous world.
Murdoch tried to ignore all the evidence evidence that the only thing that can be passed on from generation to generation is wealth and power, not intelligence or ability. Or the "street" or mundane intelligence that the founder has accumulated during decades of victories and losses. Media usurpers are radicals who would never have been hired or financed by a major media conglomerate.
So, the smart way to minimize the risks of succession is to make a deal with a professionally run non-family corporation, while leaving open the future opportunity for the administration of the Murdoch family. It requires skillful and masterful skills to do business.
The battle over whether the content or distribution is king has intensified. The major studies are being reorganized in ways that they would never have tolerated years ago. A new generation of viewers consume differently and through mobile devices. The News-Disney deal for the assets of Murdoch's 21st Century Fox should consolidate the production and control of the content, while the studios try to regain control of the distribution.
Making perfect deals leaves you in a position of maximum flexibility. Murdoch has sold his entertainment assets, he kept his precious news business. You have achieved exit liquidity if your children do not seek promotion in Disney. Its 5 percent stake makes it the largest single shareholder in Disney, bigger than the family of Apple founder Steve Jobs.
But history has shown that Murdoch is never completely happy sitting on the sidelines.
Peter Guy is a financial writer and former international banker