Rupert Murdoch’s News Corp today announces its intention to buy TV group Chris-Craft Industries in a $5 billion cash and stock deal. The move is seen as a direct challenge to US media regulations which limit the reach of any one media group.
Finalised over the weekend, the News Corp offer trumped that of Viacom, adding thirty-two TV stations to its existing stable of ten Fox Entertainment stations in New York, Los Angeles, Phoenix and Salt Lake City – plus a duopoly in Dallas.
However, the deal violates current US regulations which bar any single group from reaching more than 35% of American viewers. News Corp filed a suit in May against the Federal Communications Commission to challenge the rule and, although the outcome is not yet known, the 35% cap has already been exceeded by Viacom following its recent acquisition of CBS.
However, the FCC has adopted a softer stance on ownership issues of late and agreed to consider exceptions to its regulations barring companies from owning a newspaper and a TV or radio station in the same area. Meantime, Republican senator John McCain (Arizona), chairman of the Senate Commerce Committee recently introduced a bill to lift the cap to 50% [WAMN, 31 May-00].
News source: Financial Times