Murdoch: DirecTV Won’t Attack Cable

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New York -- News Corp. and Fox Entertainment Group chairman Rupert Murdoch said he expects to close his deal to purchase a controlling interest in DirecTV Inc. parent Hughes Electronics Corp. in the coming weeks, adding that he intends to match pricing promotions from rival direct-broadcast service provider EchoStar Communications Corp., including offering new customers free digital-video recorders.

"We will match EchoStar," he said in a brief interview following Fox Entertainment’s annual meeting here Tuesday. "But we’re not going to start a price war."

EchoStar has been extremely aggressive in free promotions, offering customers two packages -- a free three-room system complete with satellite dish, receivers and professional installation for a refundable $49.99 fee; or a DVR plus a three-room system for the same refundable $49.99 fee.

News Corp. owns an 80.6% interest in Fox, which includes the Fox Broadcasting Network, Fox Cable Networks Group and the 20th Century Fox movie studio.

However, Murdoch said DirecTV won’t echo the No. 2 DBS service provider’s anti-cable marketing campaign -- dubbed "Stop Feeding the Cable Pig" -- once his company takes control of DirecTV. "I think we’ll be pushing the benefits of DirecTV and have it at that," he said.

Murdoch added that he believes he has his management team set at DirecTV. News Corp. announced Nov. 21 that Fox Television Stations Inc. chairman Mitchell Stern would become president of DirecTV once the merger closes, replacing Roxanne Austin.

While speculation has been that Hughes vice chairman Eddy Hartenstein also could leave, Murdoch said it won’t be at his request. "I certainly hope [Hartenstein] stays," he added.

Earlier, in a question-and-answer session with reporters following the meeting, News Corp. and Fox Entertainment president and chief operating officer Peter Chernin said negotiations between Cox Communications Inc. and Fox Sports Network are moving ahead smoothly.

Chernin would not comment on reports in sister publication Broadcasting & Cable that FSN has agreed to a 7%-9% average annual rate increase over five years, substantially lower than the 35% the sports network originally proposed.

"We’re having fruitful negotiations with them," Chernin said. "We’re optimistic that we can conclude something reasonably soon."

Chernin also wouldn’t comment on reports that the main sticking point in the negotiations is over retransmission consent of Fox’s owned-and-operated television stations. According to B&C, Cox would prefer to reach one large deal to solve both cable and broadcast issues.

"I’m not convinced that there are any snags," Chernin said. "We’ve been having productive negotiations for several weeks now. I think both sides are optimistic and, certainly, both sides are working hard to get something done."

FSN’s contract with Cox expires Dec. 31. Its retransmission-consent deals end in March.

Regarding talk that Comcast Corp. is negotiating with Cablevision Systems Corp. for the Bethpage, N.Y.-based MSO’s controlling interest in regional sports networks FSN Chicago, FSN Ohio, FSN Bay Area, FSN New England and FSN Florida, Chernin said he has not been contacted.

"We have heard rumors that there have been discussions going on between Cablevision and Comcast," he said. "Those don’t involve us. At some point, they have to come to us. They know where to reach us."

Murdoch followed with a comment taking a good-natured jibe at Cablevision’s reputation for slow negotiations. "They [Cablevision] are not known for being fast negotiators," he said.

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