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Murdoch Moving on Purchase of Liberty Voting Shares

May 4, 2005  •  Post A Comment

News Corp. Chairman and CEO Rupert Murdoch on Wednesday said he expects to have a plan in place to buy back Liberty Media’s voting shares in his company by the time the company discusses its full-year results in August.

Speaking during News Corp.’s fiscal third-quarter earnings conference call, Mr. Murdoch declined to say how News Corp. plans to obtain Liberty’s voting shares, saying he didn’t want to negotiate in public.

“We are at a very sensitive point in our negotiations,” he said.

However, in response to a question about whether any deal to buy those shares might involve purchasing Liberty’s Starz Entertainment Group, Mr. Murdoch said, “It’s not something we’ve given a lot of consideration to,” adding that SEG “is not of enormous value.”

Around the time that News Corp. was transferring its domicile status to the United States from Australia last fall, Liberty was able to double its stake in the company to 18 percent, at the same obtaining enough voting control to be behind only Mr. Murdoch and his family in terms of power. Since then News Corp. has been trying to get back those voting shares and has been negotiating with Liberty to achieve a resolution.

Meanwhile, News Corp. Chief Operating Officer Peter Chernin said the company continues to evaluate whether to launch a business channel, saying the channel would need “the right support” on the affiliate side before it received a green light.

The comments came as News Corp. reported a profit of $400 million, down 8 percent from a year ago, as the company’s cable channels and filmed-entertainment divisions failed to fully offset declines at the company’s television operations. Revenue surged 17 percent to $6 billion.

Much of the company’s growth was derived from gains at the cable channels, including Fox News Channel, which generated a 45 percent surge in operating income, driven by double-digit advertising revenue growth. FX also posted gains, fueled by subscriber increases and higher advertising sales.

By contrast, Fox Broadcasting lagged during the quarter as higher programming expenses offset advertising gains produced by Fox’s carriage this year of the Super Bowl. Fox Television Stations posted operating income gains because of their carriage of the Super Bowl and Daytona 500, as well as from prime-time ratings strength led by “American Idol.”