There is no shortage of talk about corporate activity in the media sector.
Although James Packer and Kerry Stokes are the ones behind the intrigue at Consolidated Media (CMJ), Citi reckons News Corp would be prepared to enter the battle over pay TV if that is needed to protect its position.
Citi thinks News would be worried about Seven gaining control of CMJ, as that would give it a stake in pay TV and Fox Sports as well as free-to-air, which it could use to its advantage, in tandem raising the cost of content for Foxtel and Fox Sports. In that situation, News could face the loss of 2.4 per cent of its earnings.
One alternative would be for News to make its own bid for CMJ and for Foxtel to buy Austar, which would lead to a 9.6 per cent boost to earnings for News at a total cost of $3.7 billion.
