Rupert Murdoch’s NewsCorp may encounter the opposition of US regulators with its proposed $5.35 billion purchase of ten TV stations from Chris-Craft Industries.
The Federal Communications Commission is worried that the structure of the proposed deal could violate laws on foreign ownership. Under a 1995 ruling, Australian-based NewsCorp can only acquire broadcasters through its US subsidiary Fox Television. Since it is a foreign company it cannot own more than 25% of a TV or radio station in its own right.
However, although Fox would oversee the FCC license for the ten Chris-Craft stations involved in the deal, their day-to-day operations would be managed by a newly created division of NewsCorp, Newco. In a letter sent on December 21, the FCC expressed concern that Newco “may be 100 percent foreign owned and controlled”.
In response to the allegations, NewsCorp’s external attorney William Reyner described the FCC letter as routine. He added that the media titan would present information to allay the regulators’ fears.
News source: New York Times