Media mogul Rupert Murdoch has dropped plans to work with BT’s TV division to develop broadcasting for some of News UK’s properties.
The Telegraph had reported on Monday that Murdoch, executive chairman of News UK parent News Corp, wanted to a partnership that could build on News UK’s existing broadcasting business and that he was looking to “reshape and secure his media legacy amid the decline of print newspapers.”
But a spokesperson for News UK told Yahoo Finance: "News UK held an early stage discussion with BT Sport to explore limited, commercial partnership opportunities. It is not pursuing those discussions any further."
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told Yahoo Finance, this could be because "BT needed more a bigger slice of funding than News UK was prepared to stump up, given Murdoch’s cautious strategy."
News UK is struggling with a decline in its legacy print business. It was reported earlier this month that News Group Newspapers, which publishes the Sun, posted a pre-tax loss of £201m ($279m) in the year to 28 June 2020, up from a £68m loss in the previous year.
‘’Murdoch still clearly has his eyes glued to the TV in his search for opportunities to seek new options for growth and boost revenues at his media empire," said Streeter, but added that "caution is the name of the game right now, with plans for a standalone rolling TV channel scaled back, reportedly over concerns that it would not be worth the investment."
"So far it seems the right strategy to take, particularly given the shaky start experienced by the recently launched GB News."
As for BT (BT-A.L), whose shares spiked on Tuesday morning and were up 1% by the afternoon, the deal had the potential to "deliver a partner to share the burden of future investments," the report said.
This comes as BT Sport, which has acquired TV sports rights including Champions League football and some Premier League games, wants to reduce the risks linked to the regular auctions of these rights.
At the same time, the company wants to focus on upgrading its broadband network.
Yahoo Finance reached out to BT but had not received a reply at the time of writing.
In April, BT confirmed it was in talks with major streaming platforms to offload a stake in its TV arm. Global sports streaming service Dazn and others are said to to be interested.
"It’s likely that BT may well be looking for more than a partner than a bit player on the network, so is likely to be now casting its net wider for a bigger fish and its reported that interested parties include Amazon (AMZN), Walt Disney Co (DIS) and Dazn," said Streeter.