Murdoch Eyes DirecTV, But Not Yet

[Gregg Lengling]

Mike Farrell
Multichannel News
11/6/2002 5:00:00 PM
   News Corp. reported strong fiscal first-quarter results, fueled mainly by its cable networks, and chairman Rupert Murdoch hinted that he would take another run at DirecTV Inc.

For the period ended Sept. 30, News Corp. reported revenue growth of 12 percent to $3.8 billion, while operating income rose 51 percent to $548 million.

Cable-network revenue was up 27 percent to $554 million from $436 million and operating income more than tripled to $118 million from $32 million a year ago, due mainly to increased ratings at its Fox News Channel and FX cable channels.

On a conference call with analysts, Murdoch said that regarding DirecTV, News Corp. would only be interested in the 30 percent interest currently owned by General Motors Corp.

The merger between GM subsidiary Hughes Electronics Corp. and EchoStar Communications Corp. was blocked last month by regulators who called the deal anti-competitive.

While that opens the door for a News Corp. bid, EchoStar and Hughes are expected to fight the ruling in court.

'I don't know if it is going to be offered to us, or when,' Murdoch said. 'Certainly, if it was, it would take the better part of a year from now before any deal could be consummated.'

Later, on a call with reporters, Murdoch said he has not had any discussions with GM or Hughes officials, and he likely wouldn't until well after Jan. 21 -- the drop-dead date for the Hughes/EchoStar merger.

Murdoch also said a Dec. 18 put right News Corp. has with Cablevision Systems Corp. would likely be worked out without the exchange of cash.

Analysts have expected that News Corp. would swap its interests in Madison Square Garden, the National Basketball Association's New York Knicks, the National Hockey League's New York Rangers, the Women's NBA's New York Liberty and Cablevision's MetroChannels for full control of the five regional sports networks outside of New York.

We hope to have a nice settlement with them, which would be some arrangement of assets between the two of us that would be equally suitable to us both,' Murdoch said. 'We've only had the beginnings of talks with them. We hope to have a happy ending to these talks.'

News Corp. president and chief operating officer Peter Chernin didn't want to give much detail regarding a sports-rights dispute between Fox Sports West and the NBA's Los Angeles Clippers and Houston Rockets.

Both NBA teams opened their seasons without carriage on the regional nets.

'It's a negotiation,' Chernin said. 'That's the general state of most negotiations -- they want more and we want to give less.'