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Murdoch Pact to Buy 7 TV Stations Told

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From the Washington Post

Australian press baron Rupert Murdoch reached an agreement Saturday to buy seven Metromedia Inc. television stations for $2 billion, including KTTV-Channel 11 in Los Angeles, according to a source familiar with the negotiations.

The accord is part of a complex transaction that would include the immediate sale of Metromedia’s station in Boston, WCVB-TV, to the Hearst Corp.

The deal would give Murdoch, who has acquired an international media empire built primarily around newspapers and magazines, his first major foothold in the U.S. broadcasting industry.

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But the transaction must clear a host of regulatory hurdles, including Federal Communications Commission rules that will require Murdoch to become a U.S. citizen.

An FCC “cross-ownership” rule prohibits a company or individual from owning a newspaper and broadcast station in the same city. It also could force Murdoch to sell two of his largest newspapers, the New York Post and the Chicago Sun-Times, and possibly the weekly Village Voice.

Murdoch, who also owns the Times of London and New York magazine, told Cable News Network on Saturday that he and oilman Marvin Davis, co-owners of 20th Century Fox Film Corp., expect to complete negotiations this weekend to purchase the Metromedia stations.

But one source familiar with the talks said an agreement on the sale was reached Saturday morning at a meeting at the Waldorf Astoria in New York attended by Murdoch, Metromedia Chairman John W. Kluge and Hearst executives.

After the meeting, Kluge and Frank A. Bennack Jr., president and chief executive officer of Hearst, announced that Hearst had acquired Metromedia’s Boston TV station for $450 million.

Kluge was quoted by the Associated Press as saying that the Hearst purchase is “part of an overall transaction which we will be able to announce Monday.”

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Murdoch also agreed to assume more than $1 billion in debt that Kluge acquired last year when he engineered a “leveraged buy-out” of Metromedia’s public stock, turning the media conglomerate into a privately held company, Murdoch said.

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