Murdoch's Retreat Is Japan's Loss, Too

The headline says it all. "Building a TV Titan in the Sky," says USA Today in describing Rupert Murdoch's bold bid to combine his planned American Sky Broadcasting with newly purchased EchoStar and shake up the U.S. satellite and cable TV markets. But it's a different story in Japan: "Japan shows there are limits to Sky," states the Financial Times, discussing Murdoch's complete retreat at the hands of the Japanese broadcasting establishment.

Despite progress in opening its markets, Japan Inc. remains closed to foreigners investing there. Acquisitions by European or U.S. companies are nearly unheard of. Take the Murdoch fiasco.

A year ago, Murdoch bought a 21.4% stake in Asahi TV from Korean-Japanese entrepreneur Masayoshi Son, founder of Softbank Corp., a software distributor and publisher. The goal was to link programming from TV Asahi to JSkyB, a Japanese satellite-broadcasting operation jointly owned by Murdoch and Son. That would have broken the monopoly of Japan's five national broadcasters, including the Asahi group, which owns TV Asahi and the national daily, Asahi Shimbun, and given Japan's viewers some new choices.

Broadcasters closed ranks against the sale. Murdoch couldn't place any directors on the board, despite his investment. He couldn't get Asahi TV to sell programming for his JSkyB proj-

ect. After a year, Murdoch was forced to sell out to Asahi Shimbun at the same purchase price in yen. Given the yen's recent decline, Murdoch probably sold out at a loss. Is it any wonder U.S. and European companies are taking a pass on Japan?

Before it's here, it's on the Bloomberg Terminal.