News-Time fight gets ref

NEW YORK — Hollywood’s most powerful money manager, Gordon Crawford, is trying to end the war between News Corp. and Time Warner by proposing a deal that would both settle the companies’ dispute over carriage of the Fox News Channel and help News’ satellite TV efforts.

Crawford has so far made little headway, but he has not yet abandoned the effort, which, if successful, would allow News Corp. to join the Primestar Partners sat-TV venture. Primestar is a joint venture owned by Time Warner, cable giant Tele-Communications Inc. and several other cablers.

So far, however, Time Warner vice chairman Ted Turner has strongly resisted this proposal, and people close to TW questioned Wednesday what the entertainment giant would get out of doing any deal with Murdoch.

Nevertheless, neither Time Warner nor News Corp. can afford to dismiss Crawford’s efforts out of hand. A senior vice president with Capital Research, the biggest institutional investor in the entertainment industry, Crawford influences investment funds with major holdings in every major entertainment company, including all those involved in the current discussions.

He is close to all the execs involved — TW chairman Gerald Levin and president Richard Parsons, as well as Turner, Murdoch and TCI chairman John Malone.

Crawford is assuming an unusual role in this situation, however. Wall Street sources say he has not previously played such an active role in arranging a deal, although he is regularly consulted by senior entertainment execs, and even participated in Levin’s initial meeting with Turner in August 1995 when the two execs first discussed the merger of Time Warner and Turner Broadcasting Systems.

“He is being a protagonist here … trying to promote the deal,” said one person with knowledge of the discussions. Crawford declined comment for this story, as did spokesmen for both Time Warner and News Corp.

Starting point

Crawford is understood to have proposed to News Corp. that it drop its demands for carriage of the Fox News Channel on Time Warner’s cable systems to help end the dispute between the two companies, which blew up last year when Time Warner decided to carry MSNBC rather than Fox News.

The battle quickly degenerated into litigation exacerbated by public insults between Murdoch and Turner.

In recent weeks, as Murdoch’s plan to join forces with sat-TV operator EchoStar Communications Corp. has faltered, Turner has been instrumental in blocking a proposal for News Corp. to join up with the Primestar group.

The ramifications of the dispute between Murdoch and Time Warner are believed to have motivated Crawford to try and settle the fighting. As one person close to the situation said, “it would be better if they were to be a little more cooperative than at war,” given both companies’ extensive business interests around the world.

But Murdoch did not take up Crawford’s proposal not to push for carriage of Fox News, and Crawford made little effort to persuade Time Warner to carry the cable channel, aware of Turner’s strong feelings about Murdoch.

And Crawford appears so far to have had no luck persuading Turner to let News Corp. into Primestar. But sources say the Primestar discussions are also complicated by ongoing negotiations between TCI’s John Malone and Murdoch over TCI’s sale of its 50% stake in the Fox cable sports venture to News Corp.

Wall Street sources say Malone wants a big price for TCI’s interest in Fox sports in return for helping Murdoch join up with Primestar.

Malone and Murdoch are also negotiating News Corp.’s acquisition of Intl. Family Entertainment Inc., a company in which TCI has a substantial interest. It’s not clear whether this deal impacts the other talks.

“There have been a lot of moving pieces here,” said one source. Another person close to the situation says the other discussions make it difficult for News Corp. to strike a deal with Primestar regardless of Time Warner’s attitude.

One person close to the situation says Time Warner should recognize that its cable systems would be affected if Murdoch succeeded in developing a new sat-TV venture, because he has pledged to steal cable customers.

But Time Warner execs were skeptical about Murdoch’s chances when he first announced the EchoStar deal, and are likely to be more dismissive of its potential now that it appears to have unraveled.

Plans lag

Meanwhile, News Corp.’s possible entry into Primestar has delayed the cablers’ plan to reorganize the partnership into a public company, several sources say. The cablers’ partnership interests are expected to be converted into stockholdings.

At the same time, Murdoch’s focus is said to have moved off the satellite-TV issue in recent days as he negotiates a deal to buy the Los Angeles Dodgers and traveled to Japan to work on his JSkyB sat-TV venture there.

Murdoch’s future U.S. sat-TV strategy worries many investors because such a venture will likely cost billions of dollars. Murdoch has indicated his willingness to go it alone if he has to, but big investors such as Crawford clearly prefer that he reduce his exposure by partnering with a group like Primestar.

Wall Street has lately signaled its view of the two companies’ current strategies: Time Warner closed up 62¢ to an all-time high of $47.50 while News Corp fell 37¢ to $17.87, close to its year low.

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