News Corp. and Haim Saban have worked out a deal to restructure Fox Family Worldwide, making it more palatable to a potential buyer.
According to sources, both News Corp. and Saban — chairman of Saban Entertainment Inc., which owns 49 percent of Fox Family Worldwide — have agreed to set up a separate partnership for Fox Kids Network, essentially a 14-hour-per-week block of kids' programming that runs on Fox broadcast-network affiliates. However, Fox Kids' programming library would still be included in a Fox Family Worldwide sale.
"Since they're going to sell Fox Family, it didn't make sense to sell to someone and have them programming a block of time that's not branded as Fox anymore on the Fox Kids Network," one source said.
Fox Kids programming — which includes shows such as Power Rangers Time Force,
— occupies a four-hour block on the Fox network each Saturday morning, as well as a two-hour block from 3 p.m. to 5 p.m. weekdays.
News and Saban have been trying to work out a deal since December, when Saban exercised his right to put his interest in Fox Family to News Corp. Several analysts have placed the value of Fox Family at about $6 billion, including about $2 billion in debt. Potential buyers include Viacom Inc., The Walt Disney Co. and AOL Time Warner Inc.
News Corp. declined comment.
Sources familiar with Fox Family said it's likely that News Corp. will try and attach a value to the Fox Kids air time — some estimate its worth at about $100 million — to compensate Saban for his interest in News Corp. stock, and then dissolve the partnership.
"They probably have a different view as to what it [Fox Kids] is worth," said one source familiar with the matter. "I think Haim [Saban] realized it didn't make sense [to keep it]. News Corp. has been frustrated with the performance of that programming. It's been a lingering issue. Now the only issue is what it's worth."