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Gore Hits Snag in Network Purchase

The cable deal is stalled as Diller tells Vivendi he must approve a sale to the ex-vice president.

November 15, 2003|Elizabeth Jensen | Times Staff Writer

NEW YORK — Al Gore's plan to launch an MTV-style cable news network for young adults appears to have hit a snag, courtesy of media mogul Barry Diller.

The former vice president's confidants on the project have been spreading the word that they are just a couple of weeks away from formally announcing their venture. But Diller seems to have complicated their efforts to acquire the tiny cable channel, News World International.

With cable systems already filled up, the Gore team, which includes entrepreneur and Democratic Party fund-raiser Joel Hyatt, has decided to buy NWI and rework it. The channel, which reaches just 20 million homes, is controlled by Vivendi Universal Entertainment. It came up for sale after parent Vivendi Universal struck a deal to merge most of the entertainment assets with those of General Electric's NBC. NWI wasn't included.

But TV Guide reported Friday that the Gore team's purchase of the channel, for a reported $70 million, has been blocked for the moment by Diller. In a complicated, drawn-out process, Diller has been negotiating the future of his own $2.5-billion stake in the entertainment assets, which includes both a personal stake and that of InterActiveCorp, a Web-commerce company he controls. Vivendi has said it plans to buy Diller out; Diller last week said he was happy to retain his stake.

The NWI deal, which Gore supporters had portrayed as imminent, has now been stalled as Diller and Vivendi work out their differences. "We've told [VUE] that we have the right to approve the [NWI] transaction," TV Guide quoted Diller as saying. "We simply need more information before we say yes or no." Diller said that the hold-up wasn't related to "passing editorial judgment one way or another" on the Gore team's plans.

"This is about Barry Diller using every opportunity for leverage that he can with Vivendi to get what he wants from them," said a person familiar with the Gore perspective on the deal.

A message to Gore's Nashville office wasn't returned. Hyatt, who teaches at Stanford University, declined to comment via e-mail. A spokeswoman for InterActiveCorp said Diller declined to comment, while VUE didn't return calls.

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