Argues in FCC Filing That Forced Disposal Would Be Costly : Murdoch Seeks Delay in Sale of Papers

Attorneys for publisher-broadcaster Rupert Murdoch say a hurried sale of his New York and Chicago newspapers might bring such a low price that he would be better off financially to close the papers.

In a filing with the Federal Communications Commission, Murdoch sought to dismiss arguments against his request for a two-year waiver of the commission’s cross-ownership policy, which prohibits a company from owning a newspaper and a television station in the same city.

Howard Squadron, a New York attorney for Murdoch, said Thursday that the filing was not meant to be an indication that Murdoch intends to close the papers. “It’s just an argument to the FCC saying there is good reason to give us time,” Squadron said. “It is not a statement of intent at all.”

In seeking to acquire six Metromedia television stations, cross-ownership situations would occur in New York, where Murdoch owns the New York Post and seeks to buy WNEW-TV, and in Chicago, where Murdoch owns the Chicago Sun-Times and wants WFLD-TV.

Murdoch’s lawyers argue that it is difficult to sell newspapers that “operate in vigorously competitive markets dominated by larger profitable newspapers,” as is the case with the Sun-Times and the Post.

“Further adding to the difficulty of disposing of the newspapers at a reasonable price are the widely recognized problems of sustaining competitive daily newspapers in major markets with a plethora of alternative media available to the public,” Murdoch’s filing said.

“Given the obvious difficulty in selling a newspaper as compared with broadcast properties, a two-year waiver period, which is only six months longer than the time the commission has virtually routinely granted for divesting broadcast properties, is both reasonable and warranted,” the lawyers argue.

Under FCC regulations, newspaper-television station combinations that existed before 1975 are “grandfathered” unless they change hands.

Telecommunications Research and Action Center, a Washington-based group that says it represents consumers in media matters, said in opposing a waiver that daily newspapers are so vital to maintaining a diversity of editorial voices in a community that the commission should deny the waiver.

Murdoch has promised not to “co-mingle the operations of the daily newspaper and the television stations during the waiver period.”

Murdoch’s reply suggested a worst-case situation: “If sufficient pressure to sell hurriedly is exerted, the value of the physical assets of the papers--land, buildings, plant and the like--will very likely be the upper limit on purchase offers. In such an environment, either the seller (in order to avoid transaction costs) or the buyer (in order to avoid risk) might very well cease operations of the papers and liquidate its physical assets.”

A company controlled by Murdoch acquired the Sun-Times for about $100 million in early 1984.