NEW YORK — News Corp., the media company controlled by Rupert Murdoch, may be forced to buy the rest of Fox Family Worldwide Inc., a low-rated cable-television venture, from partner Saban Entertainment Inc., Saban said.
News Corp. and Saban each own 49.5% of Fox Family, which runs the Fox Family Channel. Under terms of the venture, Saban has the option to require News Corp. to buy its stake for "fair market value in cash," Saban said in a statement. The stake could fetch at least $2 billion, the Wall Street Journal and Broadcasting & Cable Online reported, citing unnamed people.
Saban has until Dec. 31 to exercise its option. A sale would come as News Corp. works to complete its roughly $5.35-billion purchase of U.S. TV broadcaster Chris-Craft Industries Inc. News Corp. also has said it would like to buy Hughes Electronics Corp., owner of DirecTV, the largest U.S. satellite-TV service. Hughes could cost $30 billion to $40 billion, analysts have said.
Fox Family Chairman and Chief Executive Haim Saban "will decide shortly whether to exercise his right to require News Corp. to buy his interest in Fox Family," closely held Saban Entertainment said in a statement.
Saban hired investment bank Morgan Stanley Dean Witter either to sell his stake in Fox Family to News Corp. or find a buyer for the entire company, Broadcasting & Cable reported, citing unidentified industry executives.
News Corp. couldn't be reached immediately for comment.
The purchase could hurt News Corp.'s chances of winning Hughes, the Wall Street Journal and Broadcasting & Cable said.
Further, Fox Family Channel has been a sore spot among News Corp.'s group of U.S. cable channels that it owns through its Fox Entertainment Group Inc. unit. At a Fox shareholders meeting in October, Murdoch said that he had hoped that a turnaround in Fox Family's ratings "would have occurred by now."
Murdoch added that while Fox Family has always made money, he had hoped the channel would be more profitable at this time.
News Corp.'s American depositary receipts, each of which represents four ordinary shares, fell 13 cents to $35.13 on the New York Stock Exchange.