Sorrell backs News Corp's attempts to buy Sky

WPP chief executive Sir Martin Sorrell has thrown his weight behind News Corporation's efforts to acquire the 60.9% of satellite broadcaster BSkyB it does not already own.

Sorrell, speaking on the day WPP reported a 28.5% lift in pre-tax profits for 2010, offered unwavering support for News Corporation, despite an anticipated legal challenge from an alliance of media groups.

He said: "We've been highly supportive of what News Corp is trying to do with BSkyB. I'm a little bit lost to understand what the difference is between News Corp owning 40% and having 51 or 100.

"I think the way News Corp runs its business is quite strong. I think it will offer enough choice and diversity in the UK market. The growth of Sky has been quite remarkable."

Under the proposals, approved yesterday by Jeremy Hunt, Sky News would become an independent public limited company, effectively "spun off" from the rest of BSkyB, leaving News Corp to leverage the rest of BSkyB's services with its own content.

Publishers of the Daily Mail, the Daily Telegraph, Daily Mirror and The Guardian, along with BT, are seeking a potential judicial review of the Government's green light.

Sorrell, founder of the advertising and marketing group behind JWT, Ogilvy and MediaCom, also left no doubt about his support for Rupert Murdoch's decision to introduce paywalls around his newspaper sites, including The Times, The Sunday Times and the News of the World.

He said: "We also welcome Rupert Murdoch's efforts to ensure that consumers pay for content that they value. In an increasingly digital world, if we are to preserve content… consumers are going to have to pay for stuff that is valuable.

"There isn't enough advertising in an increasingly fragmented world to go around to service all the applications, channels, digital channels, and avenues that we have.

"I think legacy media owners, particularly with newspapers and periodicals, have to get used to an environment which is less profitable and more difficult."

'All good news'

Sorrell made the comments as WPP celebrated an unexpectedly strong, speedy recovery in global group activities.

He said: "Western multinationals are sitting there with about two trillion dollars of cash on their balance sheet, and instead of investing in capacity in the West, they are investing in the brand and in building market share, and that's good for us."

The uplift led to a buoyant Sorrell concluding he was "pleased" it was "all good news," but he did admit "we're slightly surprised, to say the least, at the rapidity of the recovery".

Despite the strong performance, the group remained cautiously optimistic about 2011, pegging like-for-like growth at around 5%. Sorrell described himself "once bitten twice shy" after optimistically forecasting a -2% fall in 2009. Actual growth for the period was -8%.

Growth is expected to be led by the Brics and Next 11 markets.

This footage is made available to Media Week by CNBC.


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