Fox in on Nat’l Geo Channel

Murdoch to buy 50% of joint venture

NEW YORK — Rupert Murdoch’s Fox Entertainment Group announced its plans to become the majority investor in the National Geographic Channel, a joint venture between NBC and National Geographic Television (Daily Variety, May 4).

The deal will give Fox 50% of the National Geo Channel while NBC and National Geo’s interests in the company will decrease to 25% each.

The joint venture between NBC and National Geographic TV, known as National Geographic Worldwide, has distributed the National Geographic Channel in 54 countries (nearly 40 million households) outside of the U.S.

With Fox’s investment, the three companies hope to launch a U.S. National Geographic Channel. National Geo has long eyed launching a domestic cable web, but has been gun-shy due to lack of funding and clout.

Fox would not reveal the size of its investment in National Geo.

However, Chase Carey, chairman and CEO, Fox Television, said that the deal did not require Fox to kick in significant cash any time soon.

“The initial investment is modest,” Carey said. “The investment will build if (the U.S. National Geo Channel) gets going.”

Much of the motivation for Murdoch to buy into the National Geo Channel stems from potential synergies on the international front.

For example, National Geo Channel will be added to News Corp.’s Asian satcaster Star TV, which reaches 72 million homes. In addition, Star TV’s sales force, based in Hong Kong, will sell advertising on the National Geo web. “Fox provides resources around the world,” said Rick Allen, president and CEO, National Geographic Ventures. “We look with interest to the distribution platforms they own in-part or in-whole.”

With Murdoch as a 50% owner, the National Geo venture will seek to catch up with the Discovery Channel, which is seen in 79 million homes in 144 countries outside the U.S.

National Geo also hopes Murdoch’s investment will help it launch a U.S. competitor to Discovery Channel.

Launching a cable channel in the U.S. is notoriously daunting. Discovery has said it will invest at least $330 million to get its new Discovery Health Channel off the ground.

Although cable operators said they valued the strong brand of National Geographic, the web will likely have to settle for carriage on digital tiers, which have only fraction of the subscribers of basic cable. “There are too few channels available for analog carriage,” said Lynne Buening, VP of programming for Falcon Cable TV. “There’s no more room at the inn.”