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News Corp. sells U.S. TV stations for US$1.1 billion

Murdoch-owned firm sees sale as way to focus on largest, most lucrative markets

News Corp. sells U.S. TV stations for US$1.1 billion

News Corp., the media company controlled by Rupert Murdoch, agreed to sell eight of its Fox network-affiliated television stations in the U.S. to Oak Hill Capital Partners LP for about US$1.1 billion in cash.
The sale leaves Fox with 27 owned-and-operated stations and will probably be completed in the third quarter, New York-based News Corp. said in a statement Saturday. Oak Hill will add the stations to nine existing ones, according to its Web site.
News Corp. is selling the assets to focus on its largest and most lucrative markets following the US$5.2 billion takeover of Dow Jones & Co. this year. The purchase will help Oak Hill, the buyout firm founded by Texas oil billionaire Robert Bass, create a broader U.S. network after it paid US$575 million to acquire stations from New York Times Co. in May.
Shedding non-core assets
"It is part of News Corp.'s strategic decision to shed low-growth, non-core assets," said Richard Dorfman, managing director of New York-based investment firm Richard Alan Inc., who doesn't own any shares.
Network television spending fell 3.8 percent and cable television revenue fell 0.3 percent in the first half from the year-earlier period, while spot advertising rose 3.2 percent, according to Nielsen Monitor-Plus.
For Oak Hill, the purchase is "a classic private-equity play," said Dorfman. "Ad dollars are migrating to the Web, but it's a government-licensed franchise that can throw off good cash flow and reliably service debt."
Oak Hill will get WJW in Cleveland; KDVR in Denver; KTVI in St. Louis; WDAF in Kansas City, Missouri; WITI in Milwaukee; KSTU in Salt Lake City; WBRC in Birmingham, Alabama, and WGHP in Greensboro, North Carolina, according to the News Corp. statement confirmed by spokeswoman Teri Everett.
Officials at Oak Hill, which bought stations in Oklahoma, Pennsylvania, Iowa and Arkansas from New York Times earlier this year, couldn't be reached for comment Saturday at their offices in New York and Stamford, Connecticut.
The firm, established more than two decades ago by Bass, has expanded into leveraged buyouts, high-yield debt and hedge funds, raising more than US$4.6 billion from investors, including Microsoft Corp. founder Bill Gates. Oak Hill raised a US$2.5 billion fund, its second buyout pool, in 2005.
Looking a Internet properties
News Corp. hired New York investment banking firm Allen & Co. to advise it on the sale of the TV stations in June. Two months later, it agreed to buy Dow Jones, publisher of Dow Jones Newswires, Barron's, and the Wall Street Journal, after months of negotiations with the controlling Bancroft family.
Murdoch plans to use the Wall Street Journal brand to attract viewers to its television networks and Internet users to Web sites.
"News Corp.'s focus today is much more on Internet properties, such as MySpace, and cable," said Dorfman. The sale of the stations "will help News Corp. raise capital. News Corp. is not walking away from the healthy broadcast world."


Updated : 2021-06-21 22:21 GMT+08:00