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New World Vision : Murdoch's News Corp. to Buy Broadcast Group

July 18, 1996|BRIAN LOWRY | TIMES STAFF WRITER

In a statement, Tartikoff said, "My personal and professional goals are to get closer to the product, and therefore I concluded that those goals will best be fulfilled elsewhere." The executive said he'll continue to pursue TV and feature-film development as well as opportunities in publishing.

Beyond the stations, which would give Fox outlets in 15 of the top 20 TV markets, Fox would acquire a programming library that includes such shows as "The Wonder Years" and the soap opera "Santa Barbara."

In terms of current programs, New World is teamed with NBC in producing "Access Hollywood," a new syndicated magazine that will premiere in September, and it produces "Second Noah," a returning ABC drama series.

New World also has a deal with veteran television producer Stephen J. Cannell that would probably be assumed by Fox. Other holdings that may prove a better fit include Guthy-Renker, a leading producer of TV infomercials, and a 50% stake in Premiere magazine.

A few observers questioned why Murdoch needed to make such an expensive acquisition, given that Fox has a 10-year affiliation agreement with the 12 New World stations inked in May 1994. That deal, in which News Corp. acquired a 20% stake in New World for $500 million, stunned the television industry and prompted a game of musical chairs among the networks to secure deals with stations in various cities.

There are economic efficiencies in larger groups, however, since stations can combine administrative and sales functions as well as pool news resources. That logic drove the Westinghouse-CBS deal, as well as that company's recent $4.9-billion acquisition of Infinity Broadcasting, creating a massive radio station enterprise.

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Owning stations also removes the threat of a rival network snagging affiliates away when current agreements expire, as Fox did to its older competitors.

Sources say Murdoch--spurred by a meeting earlier this month with Perelman at investor Herbert Allen's summit of media moguls in Sun Valley, Idaho--decided he needed the New World stations and that, as one source put it, "they weren't going to get any cheaper."

The Sun Valley meeting also was the spawning ground for Disney's then-record-setting acquisition of Capital Cities/ABC last year.

Times staff writer Jane Hall in New York contributed to this report.

Media Deal Coverage:

* Murdoch's goal is straightforward: Expand his TV empire. D5

* Perelman profits nicely and will still be a big player. D5

* Time Warner-Turner merger would create world's largest entertainment conglomerate. A1

* Merged giant expected to sell movie companies. D6

* FTC's challenge was to dilute market control. D6

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Rupert's Reach

News Corp.'s planned acquisition of New World Communications for $2.3 billion would make Rupert Murdoch the largest owner of U.S. television stations. If the deal is approved by regulators, these television holdings will join a plethora of media ventures News Corp. has delved into the world over. A look at News Corp.'s holdings here and abroad:

United States

* Television: Fox Broadcasting Co.--which, with the addition of New World's 10 stations, would reach 34.8% of U.S. homes with TV sets--has 140 U.S. affiliates and 12 TV stations and is gaining in the ratings war with ABC, NBC and CBS.

* Movies: Twentieth Century Fox is home to this year's summer blockbuster "Independence Day" and last year's hits "Speed" and "True Lies."

* Publishing: HarperCollins, imprint for "Men Are From Mars, Women Are From Venus," one of the biggest sellers in recent years, has slipped in the race for big books, falling behind Random House, Simon & Schuster and Bantam Doubleday Dell. It also owns TV Guide, the nation's largest weekly magazine, and the New York Post newspaper.

Europe

* Cable: British Sky Broadcasting, 40%-owned by News Corp., is dueling with Bertelsmann, the Kirch Group, Canal Plus and the NetHold Group for a portion of the lucrative European pay TV market.

* Publishing: News Corp. owns the Sun (Britain's undisputed mass-market leader, with more than 4 million copies sold daily), the Sunday Times and the Times of London.

Asia

* Hong Kong-based Star TV's music station Channel V faces competition from PolyGram and MTV, a division of Viacom. Star TV is also being challenged by Telecom Holding, a subsidiary of TelecomAsia in a joint venture with state-owned Mass Communications Organisation of Thailand.

Australia

* Cable: News Corp. launched Foxtel with state-owned telephone carrier Telstra Corp.--each has a half-stake in the venture--in October 1995. Foxtel's main competitor is Optus Vision, which is backed by Continental Cablevision, Optus and Seven Network.

* Publishing: Leading newspaper publisher in Australia with about 100 publications.

Latin America

* Television: Direct-to-home satellite TV groups Sky Latin America--partially owned by News Corp., TCI, Grupo Televisa and Organizacoes Globo--and Galaxy Latin America--held by DirecTV International Inc., Cisneros Group, MVS Multivision and Televisao Abril--are racing to capture Latin America's fledgling pay TV market.

Sources: Broadcasting & Cable magazine, company reports, Times and wire reports

Researched by JENNIFER OLDHAM / Los Angeles Times

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