News Corp.'s Fox Cable Networks Group and Comcast Corp. struck deals Tuesday that will restructure the ownership of three emerging sports cable channels with a combined value of more than $2.5 billion.
Under a complicated two-part transaction, News Corp. will take control of Speedvision, and Comcast will have control of the Outdoor Life Network and a 90% stake in the Golf Channel.
The moves continue a trend in which partnerships formed to launch cable channels have dissolved, allowing one company to take control. Though channels such as A&E and Lifetime continue to be operated jointly, many others have simplified their ownership structures to eliminate conflicting agendas or uneasy partnerships.
In this case, Outdoor Life and Speedvision were both owned by a consortium of cable operators including Cox Communications, Comcast and AT&T. Fox bought a 30% share in the channels in 1998 for $90 million to fund the channels until they could break even.
In March, all parties but Comcast agreed to sell their stakes to Fox at a price that valued the networks at $1.2 billion to $1.5 billion.
Comcast, eager to reduce its reliance on cable systems by increasing its ownership of programming, was the lone holdout.
Under Tuesday's deal, Fox agreed to sell those collective interests in Outdoor Life to Comcast in exchange for Comcast's stake in Speedvision. Analysts estimate that Speedvision today is worth about $800 million, and Outdoor Life is worth $500 million.
In a separate but related transaction, Fox agreed to sell its one-third interest in the Golf Channel to Comcast, giving the Philadelphia-based cable company more than 90% ownership. Sources say Comcast paid about $365 million for the 30.9% stake, which Fox bought in 1996 for $50 million.
Comcast gains control of two cable channels to add to a portfolio that includes QVC, a regional sports channel and E! Entertainment Television, which it jointly operates with Walt Disney Co. Though Comcast contends that the two channels are growth opportunities, some say the company is eager to stockpile cable assets that it might be able to trade to Disney for control of E!.
The partners have not seen eye-to-eye in operating E!, and industry executives say the two sports networks would be a better fit within Disney, which owns ESPN.
The deal helps streamline Fox's cable holdings.
Several years ago, Fox bought out its 50-50 partner, Liberty Media, in a constellation of regional sports channels. It is shopping for a buyer of the Fox Family Channel, launched as a 50-50 joint venture with cartoon mogul Haim Saban.