News Corp. chairman Rupert Murdoch said his company is still in
negotiations regarding its "put" option to Cablevision Systems Corp., but he
added that there is no clear path to an outcome yet.
Murdoch, speaking at Fox Entertainment Group's annual meeting in New York
Thursday, said News Corp. is in active talks with Cablevision, but no deal has
been hammered out yet.
News Corp. owns 85 percent of Fox Entertainment, and Murdoch is also chairman
of Fox.
"We're talking with them," Murdoch told reporters. "We think there are ways
that we can arrange our relative assets better. But we're not breaking our
hearts over it. If they stay the way they are, that's good, too."
News Corp. has the right to "put" its 40 percent interest in Cablevision's
Rainbow Media Corp. regional sports networks Dec. 18. That stake has been valued
by some analysts at about $1 billion.
Later, News Corp. president Peter Chernin chimed in, adding that the company
has three options regarding the put: maintain the current relationship with
Cablevision, put its stake in the channels back to the MSO, or arrange an asset
swap.
Most analysts expect the latter to happen, specifically through an exchange
of News Corp.'s interest in Madison Square Garden, its professional sports teams
and Radio City Music Hall for full control of the Fox Sports Net channels
outside of the New York metropolitan area.
"We have a good relationship with [Cablevision]," Chernin said. "We're in
discussions right now."
Later, Murdoch said News Corp. had been asked to be a partner in
Cablevision's fledgling direct-broadcast satellite venture, but it turned the
MSO down.
"We have been invited to be a partner with Cablevision and declined," Murdoch
said. "We don't think [the DBS venture] is viable. We don't think they have
sufficient spectrum to compete. With 20 million people taking satellite TV
already, to come in at this stage would take many billions of dollars."
But Murdoch was cautious when asked about the possibility that News Corp.
would make a run at DirecTV Inc., the satellite-television arm of Hughes
Electronics Corp.
"The idea of us having a national distribution platform is strategically very
sound," Murdoch said, "but it's not essential. At the right time and the right
price, it could be interesting."
Speculation has been that Murdoch could team up with Liberty Media Corp.
chairman John Malone to acquire DirecTV. Liberty has also expressed an interest
in going after the DBS giant alone.
Murdoch said he has had no discussions with Malone concerning DirecTV, but he
and Malone "talk every week or two. We have a close relationship between the
companies and between the two sets of executives. Hughes hasn't even been put on
the block yet."
Murdoch also put in his two cents on talk that The Walt Disney Co. would
merge the news operations of its ABC broadcasting network with Cable News
Network in an effort to cut costs. He said such a combination would save money
but create a "two-headed monster."
"I think that each would lose their uniqueness," he
added. "It commoditizes their product."
