Copyright 2001 Daily News, L.P.  
Daily News (New York)
July 26, 2001, Thursday SPORTS FINAL EDITION
SECTION: BUSINESS; Pg. 33 MEDIA BIZ

LENGTH: 602 words

HEADLINE: FCC RULES IN RUPE'S FAVOR News Corp. seen likely to keep Post, 2 TV stations

BYLINE: By PAUL D. COLFORD DAILY NEWS BUSINESS WRITER

BODY:
The Federal Communications Commission's ruling yesterday allowing Rupert Murdoch to buy WWOR/Ch. 9 appeared likely to leave the News Corp. mogul in permanent control of the New York Post and two TV stations in New York.

In a 3-2 ruling, the FCC officially gave Murdoch two years to decide the structure of his New York media empire.

The timetable probably means he will not be forced to unload the money-losing tabloid because the agency is expected to eliminate the ban on cross-ownership before the waiver expires.

The two-year clock was built into the decision allowing News Corp.'s Fox Television subsidiary to buy 10 TV stations owned by Chris-Craft Industries, including Ch. 9.

Murdoch, who also owns WNYW/Ch. 5, won a permanent exemption in 1993 from a rule that bars a company from owning a newspaper and TV station in the same market.

The waiver allowed him to take over the Post, which was in bankruptcy.

Though the FCC said yesterday that the 1993 exemption did not apply to Murdoch's purchase of Ch. 9, FCC chairman Michael Powell, who voted for the Chris-Craft deal, said recently that he expects the agency to undertake a review of cross-ownership regulation soon. That would allow Murdoch to keep the Post and the two New York stations.

Indeed, in one of two dissenting opinions yesterday, FCC commissioner Michael Copps said: "Certain of these are long-term waivers that appear to be based on the anticipation that prior to the termination of the waivers, the rules may be relaxed such that compliance need never occur."

Yesterday's FCC decision came nearly a year after News Corp. announced plans to buy the 10 Chris-Craft stations in a deal then valued at $5.35 billion. The sale is expected to close within days, expanding Murdoch's reach to nearly 41% of the country's TV audience.

"We're very, very happy with the decision," News Corp. spokesman Andrew Butcher said. "We think it's fair and consistent with previous decisions by the commission."

Butcher said News Corp. intends to comply with the terms of the two-year waiver, but added: "We would hope that the rules will change."

Also favoring a repeal of the cross-ownership ban is the Newspaper Association of America, which represents more than 2,000 papers but does not count News Corp. among its members.

John Sturm, the group's president, said the cross-ownership ban, implemented in 1975 to protect diversity in the media, is now "horribly outdated."

He added: "The underpinning of the rule makes no sense anymore because of the huge number of media outlets and view-point sources available in every town and community, including ones that are much smaller than New York."

Christopher Day, a Washington lawyer who represented a number of community groups that opposed the Chris-Craft deal on the grounds that it threatened diversity, expressed disappointment with the FCC decision. "We feel it opens a back door to getting rid of the [ownership] rules," he said.

In seeking a waiver from having to sell the Post immediately, Murdoch's lawyers acknowledged that the tabloid had a "rocky financial history" and accounted for "approximately only 4% of advertising dollars spent on the top five daily newspapers" in the New York region. One Post insider recently estimated the paper was losing $50 million a year.

One potential obstacle to Murdoch is a proposed bill that would sharply limit the FCC's ability to loosen cross-ownership rules. Sen. Ernest Hollings (D-S.C.), chairman of the Senate commerce committee and a foe of media consolidation, is among those who introduced the measure last week.

LOAD-DATE: July 26, 2001