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. Last Updated: 07/27/2016

Fox News Courts TCI For Access

NEW YORK -- The negotiations between Fox Inc. and Tele-Communications Inc. over Fox's planned cable-news network illuminates the complex entanglements and veiled agendas at work in the increasingly concentrated media business.


It also brings together two of the most powerful media moguls, Rupert Murdoch and John Malone, who operate like lone wolves but exert tremendous power through their huge corporate interests.


Murdoch -- who raided broadcasters for stations and bought National Football League rights to build his Fox TV network -- has decided to get into the cable-news business, challenging Ted Turner's CNN, which Murdoch has labeled too liberal. But Murdoch is not a cable operator and the greatest obstacle to new cable channels is getting carriage on crowded systems.


To gain carriage for his 24-hour news channel, sources say, Murdoch has offered cable operators an unprecedented $10 per subscriber to carry his service. And now he is negotiating with Malone, the chairman of Tele-Communications Inc., the nation's largest cable operator, for a deal that could give TCI a 20 percent stake in the Fox news channel in exchange for distribution.


Fox hopes to have 10 million of TCI's 14 million subscribers when the channel launches this fall.


But TCI owns 21 percent of Turner Broadcasting, which owns CNN, the major cable news competitor. TCI's stake in Turner also makes Malone a player in the proposed Turner-Time Warner merger. Sources say neither Turner nor Time Warner is happy with Malone's negotiations with Murdoch.


Some industry observers said that Malone's deal with Murdoch would hurt his relationships with Turner and Time Warner and could adversely affect the Time Warner merger. But one Turner executive said Malone's willingness to negotiate with Murdoch may reflect a practical calculation that there will be competitors to CNN and TCI can have a say in which will succeed.