LONDON (Brand Republic) – News Corp has expanded its US television business with the acquisition of Chris-Craft Industries for around $5bn.
The media giant outbid its rival Viacom on Monday (August 14) to take control of the broadcaster, which operates 10 television stations through its BHC Communications and United Television subsidiaries. News Corp already owns 22 stations through its Fox Entertainment group.
With the acquisition, News Corp becomes the most powerful TV company in the US with 32 regional stations. It is expected to have to sell at least two stations in order to comply with rules set by the FCC regulator that limit each broadcaster to 35% of the nation’s audience. The regulator last year relaxed legislation to allow broadcasters to own up to two stations in one market.
This new regulation has allowed News Corp, through the deal with Chris-Craft, to boost its presence in significant markets such as New York, Los Angeles and Phoenix. The deal will also increase its US revenues to more than 75% of the company’s turnover.
The deal is being seen as bad news for Viacom’s UPN network. UPN is broadcast on Chris-Craft stations in certain markets. The station was a joint venture between Chris-Craft and Viacom five years ago and has recently turned sour. A legal battle between the two companies resulted in Viacom buying Chris-Craft’s stake in UPN for a token $5m.
Viacom had been in negotiations with Chris-Craft for several months until News Corp stepped in two weeks ago and offered a higher price.