You will be redirected back to your article in seconds

Rupert Murdoch to Buy Half of Fox’s Parent Company

Dramatically expanding his media empire into the Hollywood film business, press magnate Rupert Murdoch has an agreement with Marvin Davis to purchase 50% of TCF Holdings Inc., the parent of 20th Century Fox, for $250,000,000.

Davis and Murdoch, in a joint statement yesterday that caught the industry by surprise, said that Murdoch’s News Corporation Ltd. was paying $162,000,000 for a half-interest in TCF and that “in addition, News will advance $88,000,000” to TCF.

The operative word, however, is the combined sum of the two figures — $250,000,000 — because the $88,000,000 is coming to TCP in the form of a loan that is in effect described as an “advance” for tax considerations.

Murdoch, Australian publisher of the New York Post, the Times of London and numerous other newspapers and media enterprises, called the deal “a significant investment for the News Corporation” and underscored “the outstanding leadership of Barry Diller” (Fox chairman and chief exec officer).

Unlike his personal forays into some of his newspaper domains, Murdoch is expected to leave production decisions and the daily running of the studio to Diller.

Immediate impact of the Murdoch purchase will be the pumping of a fresh $132,000,000, through TCF Holdings, into me Fox Film Corp.

The balance of $118,000,000,said the new partners, “will be used to fully retire TCP Holdings’ bank debt and to reduce shareholder (i.e. Davis) debt.”

The transaction will make equal the equity percentage and shareholder debt positions of the Davis and News interests. But unaffected, said the announcement, will be Fox’ recently announced plans for new bank financing (reportedly a $400,- 000,000 line of credit maturing in seven years), and a new homevid deal with CBS that would additionaliy bring Fox some $120,000,000.

Statement reported that Davis’ recently announced $50,000,000 capital contribution to Fox is included in the $132,000,000 figure going from TCP to Fox. But it remains unclear whether Davis will now actually make that contribution since TCP Holdings is a new ballgame with Murdoch as halfpartner.

Thus, Murdoch, who waged a battle for control of Warner Communications stock last year before being bought out as a hostile investor for a premium price ($172,600,- 000 for 5.500,000 shares) becomes the first newspaper baron since William Randolph Hearst to gain major entry into a Hollywood major.

U.S. Holdings

Among Murdoch’s current domestic ownerships are the Village Voice, New York Magazine, the Chicago Sun-Times, the San Antonio Express News, the Boston Herald, and the aforementioned New York Post and The Times of London. He also owns broadcast outlets abroad. His News Corporation is an Aussie public company that is, in effect, controlled by Murdoch, who rules over its web of international interests.

Fox corporate spokesmen yesterday stressed that Murdoch’s arrival on the Fox scene is strictly “from a financial point of view” and that the action will generate considerable financial clout for a company whose operating earnings fell more than $110,000,000 in fiscal ’84.

Davis, with then-partner Mark Rich & Co. (a Swiss-based commodities firm) bought Fox in 1981 for $725,000,000, with the help of $550,000,000 in bank loans. (Rich, in tax troubles with the U.S. government, was bought out by Davis last year.) After buying Pox, Davis sold off outright the company’s Coca-Cola Bottling Co. in Minneapolis. Fox’ United TV, and its Hoyts theater chain in Australia.

Davis also sold 50% of Fox’ Studio Properties Co. and 50% of the company’s Pebble Beach and Aspen, Colo., interests to Aetna Life Insurance.

Later Aetna sold those interests back to a little-publicized entity known as M/K/D/GH (letters stand for Miller, Klutznkk/Davis/Grcy). Latter Davis group is not controlled by TCP Holdings and, in effect, owns 50% of the Fox lot.

Pocket To Pocket

During the years 1981-84, Davis’ Fox Film made pocket-to-pocket payments to Holdings totalling $538,595,000 as Davis’ equity as the sole Fox stockholder slid from $722,431,000 in ’81 to $66,665,- 000, according to the studio’s last 10K filing with the Securities & Exchange Commission (Daily Variety, Nov. 28, 1984).

With the infusion of Murdoch’s cash, the studio appears in a much stronger financial shape, with added equity and added working capital.

Diller yesterday pointed to “the definite correlation between entertainment and communications enterprises.” Davis stated that he looked forward “to a long and fruitful association.”

Transaction will take approximately one month to complete upon expiration of the waiting period required by the Hart-Scott-Rodino Antitrust Improvements Act.

More Biz

  • Doug Davis and Jodie ShihadehVariety Power

    Jodie Shihadeh Named Partner at The Davis Firm

    Jodie Shihadeh has been named Partner at The Davis Firm, PLLC. She joined the firm in 2011 and rose from associate to Managing Attorney and now partner. She graduated from Boston College and received her law degree from Fordham University School of Law in 2011. While still in law school she interned in the Business [...]

  • Peak TV Saturation TV Placeholder

    Nickelodeon Alum Keith Dawkins Sets Kidvid Partnership With Believe Media Group

    Former Nickelodeon executive Keith Dawkins has partnered with Believe Media Group to develop children’s programming. Dawkins will partner with Believe under his newly formed Rock Hill Media Ventures, which aims to advise companies in media, entertainment and sports on working with diverse and emerging talent. Dawkins previously spent 17 years at Viacom, most of which [...]

  • CBS Studios Exterior

    CBS Credit Union Manager Pleads Guilty to $40 Million Fraud

    The manager of a credit union for CBS employees pleaded guilty in Los Angeles federal court on Monday to a $40 million embezzlement scheme. Edward Rostohar, 62, was arrested in March after the scheme began to unravel. According to prosecutors, he admitted to stealing money from the bank for the last 20 years. Rostohar is [...]

  • Norman Reedus as Daryl Dixon - The

    CAA's Packaging Fee Becomes Flashpoint in 'Walking Dead' Litigation

    The issue that is at the heart of the WGA’s present standoff with talent agencies has flared up as a source of tension in the litigation between AMC Networks and Frank Darabont and CAA over profit participation on “The Walking Dead.” The practice of talent agencies receiving packaging fees for helping to assemble the creative [...]

  • Sony Music to Deliver ‘Real Time’

    Sony Music to Deliver ‘Real Time’ Data, Royalty Payments to Artists

    Sony Music today announced two new payment features for its artists — “Real Time Royalties” and “Cash Out” — through its artist portal beginning this fall. 

A memo sent to artists Monday morning and obtained by Variety says  the initiatives will “allow our artists and royalty participants to view and withdraw earnings faster than ever [...]

  • Whitney Houston

    Whitney Houston Estate Plans Hologram Tour, Album, Musical

    In the seven years since Whitney Houston’s death, there has been relatively little of the asset-exploitation that usually follows the passing of a music icon, apart from a smattering of previously unreleased recordings, a pair of harrowing documentaries and a lot of unflattering press. But according to an article in the New York Times, the [...]

  • rocketman-elton-john-costume

    Elton John Biopic 'Rocketman' Taps Lucky Brand Collaboration as Part of Promo Push

    Paramount has set a May 28 release date for its Elton John-inspired clothing collection with retailer Lucky Brand, which celebrates the performer’s iconic style and new biopic, “Rocketman” (see tickets and showtimes here). The limited-edition collaboration arrives in stores three days before the film hits theaters, though it’s available for purchase right now on LuckyBrand.com. [...]

More From Our Brands

Access exclusive content