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Murdoch explores deal with Nat’l Geo TV, NBC

Marriage may spawn new channel

NEW YORK — Rupert Murdoch’s News Corp. is in final negotiations to buy into a joint venture between NBC and National Geographic Television, a move that would give the enterprise the financing to launch a U.S. cable channel based on the National Geo brand. Deal could be announced in the next week.

NBC’s existing joint partnership with National Geographic TV, dubbed National Geographic Worldwide, operates National Geographic Channels in about 50 countries outside the U.S.

When News Corp. invests in the venture, the Murdoch-led company will own 40% of the joint venture, with NBC and National Geo each owning 30%.

For several years, National Geographic has hungered to launch a domestic cable channel, but the natural history company previously did not have enough leverage to break into the extremely competitive U.S. cable market.

Competing with Discovery

If National Geo can gain distribution in the U.S., the channel will provide direct competition to the Discovery Channel and its sibling Animal Planet.

News Corp., which will contribute an undisclosed amount of cash to the National Geo venture, has launched several cable channels in the U.S. in recent years, including FX and Fox News Channel. News Corp. also has large investments in U.S. regional sports networks.

Presumably, News Corp. in conjunction with NBC would have the power to launch a domestic National Geographic Channel in the U.S.

“It’s got some muscle behind it,” said Jedd Palmer, a consultant who used to head programming for TCI and MediaOne, referring to a domestic National Geo Channel.

However, Palmer said the cable market is so competitive that even with the National Geographic Channel’s new partners, there’s no sure thing when launching a cable channel.

“It will be tough for it to enter the market, because it’s up against Discovery, which has a great affiliate sales operation,” Palmer said.

Analog or digital?

It is unknown whether the National Geographic Channel will seek traditional (analog) cable carriage or launch on digital tiers, which are just beginning to roll out.

While National Geographic’s brand is well-known around the globe, the company’s existing library of programming is fairly thin. As a result, the channel will have to ramp up production to ensure the web has enough programming.

As part of its anticipated deal with News Corp. and NBC, National Geographic TV will have language in its contract guaranteeing it final editorial say over all of its programming.

Murdoch, who in the past hasn’t shown much interest in highbrow programming, is hot to invest in National Geo, one insider said, because he “loves brands.”

For NBC, a National Geographic Channel launch in the U.S. will add to its portfolio of cable investments, which include A&E Networks, ValueVision, American Movie Classics and Bravo.

NBC has also invested in a slew of Internet and new media companies, such as Snap and CNET.

NBC is under pressure to develop new revenue streams, because profits in its core broadcast network business are declining.

A News Corp. spokesman declined comment. NBC could not be reached for comment.