Murdoch: Rejected Cablevision venture
Copyright 2002 Newsday, Inc.
Newsday (New York, NY)…11/22/2002
News Corp. Chairman Rupert Murdoch said yesterday that he doubts Cablevision System Corp.'s plans for a new satellite TV service can succeed and that he rejected an offer to be a partner in the venture.
"We do not believe in the viability of it," Murdoch said at a news conference in Manhattan after the annual meeting of Fox Entertainment Group. "I don't think they have sufficient spectrum to compete with the others."
Murdoch's remarks are especially notable because his company controls one of the world's biggest overseas satellite ventures and because he tried to acquire DIRECTV - the biggest U.S. satellite TV service - and said he may try again, depending on price.
Murdoch has joined with Cablevision chairman Charles Dolan in ventures over the years, including their current sports and entertainment partnership that includes Madison Square Garden.
Cablevision, the biggest cable TV operator in the New York City metropolitan area, plans to launch a Lockheed-Martin satellite in March and may start offering service to much of the United States by 2004.
But a plan for Cablevision to gain extra satellite transmission capacity and equipment from EchoStar Communications is all but dead because government regulators have blocked the proposed merger of DirecTV and EchoStar.
"To come in at this stage would take a lot," Murdoch said, estimating the price of such a venture at billions of dollars. Cablevision is spending $140 million on the satellite venture this year and plans to spend at least another $75 million next year.
Cablevision chief executive James Dolan said earlier this month that one of the options is to sell the satellite after it is launched.
"We certainly could buy it," Murdoch said in response to a question.
When asked about Cablevision's claim that its cutting-edge satellite technology would be an advantage, Murdoch said, "Oh sure, we all claim that." He then added that the new technology would give Cablevision 30 percent extra capacity per transponder.
Meanwhile, News Corp. President Peter Chernin said current discussions with Cablevision to rearrange its sports and entertainment partnership may result in little or no change. Three months ago, Murdoch had said he expected to demand Cablevision pay News Corp. more than $1 billion if they could not agree to rearrange the partnership.
Wall Street analysts have speculated the partners would agree to give News Corp. control of several regional Fox Sports channels outside New York City and to give Cablevision full ownership of the Garden, the Knicks and Rangers, Radio City Music Hall and other New York elements in the venture. But Chernin indicated the talks could fall far short of that.
"We're trying to balance all the various options," Chernin said. "It's a wide range of possibilities."