Fox Film, TV Assets Aim for IPO

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News Corp. scored points with investors last week,
announcing plans to sell to the public 20 percent equity in a new unit called the Fox
Group, which lumps together Rupert Murdoch's U.S. film, television and sports
properties.

Analysts -- and, according to a Reuters report, News Corp.
chairman Murdoch himself -- said the initial public offering, planned for later this year,
should end up valuing Fox Group at about $20 billion.

Shares in News Corp. rose 12 percent on the announcement,
closing at $33.06 last Monday, up from $29.50 the previous Friday, before dropping to
$31.88 at midday Thursday.

Fox Group assets would include News Corp.'s
cable-network stakes: 50 percent of the regional-sports-centered Fox/Liberty Networks, 50
percent of FX, 49.5 percent of Fox Family Channel and 100 percent of FXM: Movies From Fox
and Fox News Channel.

Other assets include the 20th Century Fox and 20th Century
Fox Television studios, Fox Broadcasting Co. and 22 owned-and-operated TV stations. The
Los Angeles Dodgers Major League Baseball team will also be in the group, but
Murdoch's satellite-TV platforms -- such as British Sky Broadcasting Inc. and Star TV
-- and its publishing operations won't be in the mix.

Fox didn't spell out how much debt would be assigned
to the new group.

Cowen & Co. media analyst Gary Farber said the IPO plan
was a great move by News Corp. and one of several actions that Murdoch has taken over the
past year or so that have resonated well with investors.

For years, investors struggled with News Corp.'s
complexity. In particular, "people had a hard time getting their hands around the
overseas ventures and when they'd be cash-flow-positive," Farber said. The IPO
helps to simplify that structure.

News Corp.'s cash flow in the past had been weighted
toward print businesses, which trade at lower multiples, so that attached a discount to
the stock.

"Single-handedly, they knocked that risk down by
separating the company," Farber said.

Some analysts speculated that Murdoch might use the cash
raised from the IPO and from asset sales -- such as selling TV Guide to United
Video Satellite Group Inc. -- to buy something new, like a music division. News Corp.,
which hasn't filed a registration statement for the planned IPO yet, said the
proceeds would go for general purposes, including reducing debt.

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