The outgoing chairman of News Corp‘s European business, Marty Pompadur, has warned that the economic downturn will have a “very, very ugly” effect on the media – and could force some companies to put themselves up for sale.
Pompadur, who resigned from the News Corp board last week after more than 10 years as one of Rupert Murdoch’s closest lieutenants, told the European Media Leaders Summit in London that the impending recession would be “pretty deep and pretty long”.
“As I look at what’s going on globally, in the United States, Europe and the Middle East, it’s very, very ugly,’he said yesterday.
“It’s not good out there. They’re talking about a recession – I hope they’re not talking about something worse than that.”
As stock values tumble, Pompadur predicted that a small number of media companies would change hands.
“If a company has a lot of debt they’re in trouble,’he said. ‘Companies that are diversified with several different profit centres have a better opportunity.
“Those companies that are private or controlled by families have a better opportunity to survive in this kind of environment and prosper.
“I think there will be some companies that are forced to sell because they can’t meet their debt obligations, but I don’t think we’re going to see a lot of them.”
Pompadur – who began his media career in 1960 with a 17-year spell at ABC in the United States – said the newspaper business was in “terrible shape”.
“I have a 19-year-old daughter and she has never read a newspaper and never will but she knows more about what’s going on in the world than I do,” he said.
“Just looking at the newspaper business, they’re in terrible shape and circulation and advertising continue to decline.”
But he added: “Everybody’s been writing off television for some time and I don’t agree with that.
“I think there will always be a need for mass-market. I see the television networks continuing.”