Media owner Rupert Murdoch yesterday announced a sweeping reorganization of his American entertainment and broadcast holdings and plans to combine his Twentieth Century Fox Film Corp. with his newly acquired Metromedia television stations into a new television network.
Since June, both Murdoch and Fox Chairman Bary Diller have publicly expressed their desire to link Twentieth Century Fox's film and video production capabilities and Metromedia's television stations into the nucleus of a national television network service.
In May, Murdoch acquired the six Metromedia stations (including Washington's WTTG) for $1.55 billion from company founder John Kluge. After spinning off the Boston station, Murdoch's Metromedia holdings -- pending Federal Communications Commission approval -- include stations in the nation's three largest markets, New York, Los Angeles and Chicago. Metromedia's stations reach roughly 22 percent of the nation's viewers.
Because FCC rules limit foreign ownership of broadcast properties, Murdoch, who also has extensive newspaper holdings here, in Britian and in his native Australia, had to become a U.S. citizen citizen in order to make the Metromedia acquisitions.
In a statement, Murdoch and Diller announced a "restructuring of the entertainment and broadcasting interest of News America Murdoch's U.S. company and TCF Holdings," the parent of Twentieth Century Fox, that will blend Fox and the television stations into a single entity: Fox Inc.
Fox Inc. would consist of three operating groups -- Twentieth Century Fox Film Corp., the Fox Station Group and Fox Television Network.
"Organization plans for Fox Station Group and Fox Television Network will be announced subsequent to pending approvals of acquisition of the Metromedia television properties," said Murdoch in the statement.
Currently, the FCC is weighing approval of Murdoch's bid to acquire Metromedia. Because of FCC regulations, Murdoch may have to sell his Chicago Sun Times and New York Post newspapers because of cross-ownership of media restrictions. Murdoch has petitioned the FCC for a two-year grace period to make those sales.
Fox Inc. also announced that Alan Horn, former chairman and cheif executive officer of Embassy Communications Inc., would become president and chief operating officer reporting to Diller.
In a telephone interview, Diller indicated that formal implementation of Fox Inc.'s network plans would begin by the end of next year or early 1987, pending FCC approval.
"We plan to begin a networking service that will be fed to independent and affiliated stations in the U.S.," said Diller. "That's what we identified as one of our potential areas of growth.
"We think the term 'fourth network' is irrelevant. It's not going to program across the board; it will grow from one night to two nights a week -- it will be a programs service."
Diller downplayed earlier reports that a Fox/Metromedia network would target certain audience segments. "We've thought a lot about it but nothing is solid."
Diller, who was once a top programming executive at ABC Television, came to Fox last October from Paramount Pictures, where he had spent 10 years at the head of that Gulf & Western Industries Inc. subsidiary.
Murdoch, who also owns a television network in Australia and a satellite television superstation in Europe, has long expressed a desire to become a global media power in both newspapers and television.