Erdogan Thwarts Murdoch as Graft Probe Reveals Turkey Media Grab
In March 2012, Rupert Murdoch flew to Ankara and spent an hour chatting with Prime Minister Recep Tayyip Erdogan about investing in Turkey.
It wasnt his first foray into the country. Murdochs News Corp., which at the time owned film, television and newspaper companies from North America to Europe and Australia, had bought a stake in one television channel in Turkey in 2006. In 2008, News Corp. had been interested in two other media assets: a national newspaper and its television partner.
By the time of the meeting with Erdogan, those companies had lost as much as $200 million, their financial reports showed. The owner, Calik Holding AS, had hired Goldman Sachs Group Inc. to seek buyers. The bank had done its job. News Corp. was among the potential bidders, in addition to Time Warner Inc. and private-equity firms such as TPG Capital, KKR & Co. and Dubais Abraaj Group.
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Their quest proved futile. By October, Calik had asked Goldman Sachs to abandon its sales efforts, even as negotiations were underway with Time Warner, according to a person familiar with the discussions. Two months later, Calik sold the media properties to a Turkish company.
The matchmaker: Erdogan, according to a 252-page police account of mobile-phone intercepts, stakeouts and video surveillance, part of a 15-month investigation into government corruption. The newspaper, Sabah, and the channel, ATV, had been allies of Erdogans AK Party since 2008, when Calik bought them.
Sabah is seen as a traditional, respectable broadsheet and the prime minister seems to want to keep it in friendly hands, said Fadi Hakura, a London-based associate fellow at Chatham House who specializes in Turkey. Since 80 percent of his voters get their news from the print media, rather than the Internet, controlling the newspapers message is critical.
For Erdogan, battling a barrage of leaks about corruption, the coming weeks are key to a public relations offensive before local elections March 30 and a presidential election in August in which he may run. Already, television channels allied with him cut off opposition speakers in parliament, newspapers supporting him reject suggestions of impropriety and Erdogan himself calls the probe an attempted coup.
Turkeys Political Dramas
The battle for media control stepped up last year, when Sabah and ATV were for sale. While Time Warner and the others worked with Goldman Sachs to hammer out a deal, Erdogan asked his son-in-law, chief executive officer of the company that owned the media properties, to come to his Istanbul home.
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Erdogan Thwarts Murdoch as Graft Probe Reveals Turkey Media Grab