Rupert Murdoch's News Corp. is giving up full control of TV Guide, selling a majority stake in the nation's best-selling weekly magazine for $2 billion to a cable channel guide operator controlled by Tele-Communications Inc.
United Video Satellite Group Inc. plans to use the vaunted TV Guide name for the Prevue Channel, its on-screen channel listing service seen in more than 50 million U.S. cable homes.United Video will own TV Guide, and News Corp. will get a 48 percent voting stake in the company in return. Cable giant TCI, which currently has a 93 percent voting stake in United Video, will also have 48 percent. The public will control the rest.
In addition to changing ownership of one of the best-known brand names in publishing, the deal marks further cooperation between two of the nation's most powerful media moguls, Murdoch and TCI chief John Malone.
TCI and News Corp. are partners in Fox Sports Net. News Corp. also agreed last year to merge its satellite broadcasting operations with Primestar, a satellite company controlled by TCI and other major cable companies. The Justice Department is trying to block that deal.
News Corp. will receive $800 million in cash and $1.2 billion in United Video stock in exchange for its TV Guide properties.
TCI will own 44 percent of United Video's common stock after the deal is completed, while News Corp. will own 40 percent and the remaining 16 percent will be publicly owned. Certain shares carry more voting power.
The cash could be used for another acquisition for Murdoch's empire, which includes the Fox network and studio, HarperCollins books, newspapers such as the New York Post and the Los Angeles Dodgers.
With the deal, Murdoch will get back about what he paid for TV Guide a decade ago, while holding onto a significant ownership stake.
Murdoch bought TV Guide, along with Seventeen and the Daily Racing Form, for $3 billion in 1988 from Walter Annenberg. Murdoch sold Seventeen, the Daily Racing Form and other magazines three years later for $650 million.
TV Guide has been the jewel of News Corp.'s magazines and inserts business, which contributes about $1.2 billion, or 11 percent, of the company's annual revenue. It has circulation of about 13 million, making it the best-selling U.S. weekly and the second-largest consumer magazine in the world behind Reader's Digest.