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Murdoch Plans to Buy TV Guide, Racing Form : ‘17’ Magazine Also in $3-Billion Deal With Annenberg

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Times Staff Writer

Reaching further to expand his communications empire, media mogul Rupert Murdoch announced Sunday that he plans to purchase TV Guide, the Daily Racing Form and Seventeen magazine for $3 billion from former U.S. Ambassador Walter H. Annenberg.

The tentative deal, whose jewel is TV Guide, the country’s largest-selling weekly magazine, was widely believed to be the most expensive publication purchase in the United States. The sale leaves the 80-year-old Annenberg, who hand-picked Murdoch from a bevy of potential buyers, without any direct media ownership and free to pursue his stated interests in education and philanthropy.

With the purchase of TV Guide, whose weekly circulation tops 17 million, Murdoch, 58, will have top-selling national publications on three continents, including his native Australia, as well as a collection of television stations in the United States.

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His empire, News Corp., which generated revenues of about $5 billion last year, also includes the Fox Television Network, the 20th Century Fox movie studios, Harper & Row book publishers, the London Times and two other large dailies in England.

“These publications are the most valuable and prized publishing properties in the world,” Murdoch said in a statement announcing the purchase.

John Veronis, a New York investment banker who handled the sale of the publications’ parent Triangle Publications Inc. for Annenberg, said Murdoch was the only potential buyer the former ambassador dealt with since formally putting the publications on the market last month.

He said the two met twice: once at Annenberg’s Philadelphia-area estate July 7 to discuss a possible sale and again last Wednesday in Los Angeles to shake hands on it. Veronis said the two men met about 20 years ago during Annenberg’s stint as ambassador to Britain in the Administration of former President Richard M. Nixon.

“Ambassador Annenberg very much wanted Mr. Murdoch to own his businesses,” Veronis said. “He has tremendous respect for Mr. Murdoch. He calls him a ‘sensational human being.’ ”

The assessment has not been widely shared. Since entering into the U.S. media market in 1973 with the purchase of the San Antonio Express-News, Murdoch has generated controversy and headlines with many of his acquisitions.

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Employees have objected to his anti-labor union activities; traditional newspaper readers have been shocked by his proven circulation-boosting formula of lurid crime and sex stories, promotional games and crazy-quilt layouts, and liberal politicians have blasted his staunchly conservative views.

Strikes Again

And controversy has struck again.

The pending TV Guide sale was attacked late Sunday, just hours after its announcement, by Andrew J. Schwartzman, executive director of the Media Access Project, a Washington-based public interest telecommunications law firm. Schwartzman told Associated Press that Murdoch’s planned TV Guide purchase raises anti-trust questions because his ownership of the Fox television network poses the possibility that Murdoch could use the magazine to favor Fox stations and programs.

“Any media conglomeration of this scope ought to set off warning signals at the Federal Trade Commission and the Justice Department,” Schwartzman said.

However, a spokesman for Murdoch said the media baron has already moved to defuse the criticism by agreeing that TV Guide will be operated independently of his other interests. Although the spokesman offered no specifics on how TV Guide would fit into the Murdoch chain, he stressed that editorial content and advertising of the television magazine would be separate from the other media holdings.

The price Murdoch is willing to pay for the three publications has also raised a few eyebrows on Wall Street, especially given the media spending spree Murdoch has indulged in for the last several years and the continuing losses he faces at the Fox television network.

J. Kendrick Noble, a media analyst for Paine Webber in New York, said the $3-billion price Annenberg would receive is higher than what Wall Street had expected the publications would command. Still, he conceded that Murdoch has a history of paying a premium price for properties he wants. Noble specifically noted the $300 million he paid for Harper & Row and the nearly $600 million he spent for Fox.

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Now in its second year of operations, the Fox network is reportedly losing about $75 million annually, and prospects are slim that efforts to turn the fledgling operation into the nation’s fourth major television network will soon succeed.

Still Murdoch’s operation is hardly strained. Just last week, he sold 20th Century Fox’s real estate parcel for $320 million. Earlier this year, to comply with Federal Communications Commission regulations, he sold the New York Post for $37 million.

Noble said that while many other media companies would have jumped at the chance to buy TV Guide, the Racing Form or Seventeen, he speculated that Murdoch may have been among a very few willing to buy all three of Annenberg’s holdings at once.

For his part, Annenberg said only that he was “very happy that my publications are passing to Mr. Murdoch’s company.”

He said he now plans “to devote the rest of my life to education and philanthropy.” Annenberg’s past philanthropies include the establishment of Annenberg communication schools at the University of Southern California and the University of Pennsylvania, to which he has given one-third of Triangle’s stock over the years.

Annenberg, whose daughter Wallis, of Beverly Hills, has worked at TV Guide in Los Angeles for several years, had indicated last year that he wanted to sell his three publications before 1990.

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MURDOCH’S HOLDINGS Here is a list of the major media holdings of Rupert Murdoch’s News Corp., which on Sunday announced an agreement to buy Triangle Publications Inc., publisher of TV Guide, the Daily Racing Form and Seventeen magazine, for $3 billion.

NEWSPAPERS United States

Boston Herald

San Antonio Express-News Britain

The Times (London)

The Sunday Times (London)

The Sun (London)

News of the World (London) Australia

The Herald (Melbourne)

Weekly Times (Melbourne)

The Daily Telegraph (Sydney)

The Daily Mirror (Sydney)

The Australian (Sydney) Hong Kong

South China Morning Post

MAGAZINES New York Star New Woman Elle (50% of U.S. edition) In Fashion Sportswear International

BROADCASTING 20th Century Fox Film Corp. Fox Broadcasting WXFT-TV (Boston) WNYW-TV (New York) KTTV-TV (Los Angeles) WFLD-TV (Chicago) WTTG-TV (Washington) KRIV-TV (Houston) KDAF-TV (Dallas)

PUBLISHING Harper & Row William Collins & Sons (Glasgow, Scotland)

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