Fox, TCI in deal with Cablevision to create national sports network
Jun. 23, 1997
NEW YORK (AP) _ Rupert Murdoch and cable's Tele-Communications Inc. are teaming up with Cablevision Systems Corp. to form a new national sports network to rival ESPN.
The companies announced today that Fox/Liberty Networks, a joint venture of TCI and Murdoch's News Corp., will buy 40 percent of Cablevision's sports assets for $850 million. They include the New York Knicks and Rangers as well as eight regional sports channels.
Those assets will be combined with nine Fox/Liberty regional sports channels and regional sports systems affiliated with Fox. Together, they will be used to assemble a network with coast-to-coast reach.
``This is a major step in providing a real national sports network under the Fox name with Fox quality,'' Murdoch said. ``Viewers will now have Fox Sports programming on a local and national level, which viewers have long desired.''
Fox Sports Net, as the new network will be called, will reach 55 million homes. It will help both partners by allowing them to negotiate for national sports programming and national advertising dollars.
Viewers will be able to see games, broadcast both nationally and regionally, and sports news.
The deal, expected since last week, represents another scuffle in the worldwide battle for media assets. Cablevision recently announced it was increasing its presence in the New York area by buying 10 cable systems from TCI, the nation's biggest cable company, with its own stock.
Fox Sports Net further melds Cablevision and TCI's futures. Fox/Liberty Media, a 50-50 venture of News Corp. and TCI's Liberty Media programming arm, will own half of the new sports network.
The other half will be owned by Cablevision's Rainbow Media Holdings, its programming arm. NBC owns 25 percent of Rainbow.
``This alliance represents a significant step forward in Cablevision's overall financial strategy of reducing leverage and focusing on our core businesses,'' said Cablevision chief executive James Dolan.
Control of the new network will be split. Fox/Liberty will manage the national programming service and the sale of national advertising.
Rainbow will continue to manage its regional sports networks. All will be renamed Fox Sports Net, except for MSG Network and SportsChannel Florida, which keep their names. Fox/Liberty will continue to manage its sports networks, which will also be renamed Fox Sports Net.
As for the Madison Square Garden properties owned by Cablevision, which comprise the Knicks, Rangers, MSG Network and the Manhattan arena, Rainbow will retain management control.
Cablevision said it also plans to announce today that vice chairman Marc Lustgarten will become chairman of Madison Square Garden.
The Cablevision sports properties were acquired by the cable company through a buyout of partner ITT Corp., which sold them to defend against a hostile bid from Hilton Hotels. That $650 million deal was completed last week.
Lustgarten said the deal ``highlights and enhances the value of Cablevision's key sports assets.'' The partners also hope it will provide a healthy dose of competition for ESPN, which currently dominates cable sports.