15 States Oppose Proposed Sale of FNN to NBC Division
Pennsylvania’s top legal officer said 15 states asked a federal bankruptcy court judge Monday to reject the proposed sale of the Financial News Network cable television channel to its main competitor.
Atty. Gen. Ernie Preate Jr. of Pennsylvania said in a petition that the $105-million deal to sell FNN to the cable division of General Electric Co.'s National Broadcasting Co. would violate federal antitrust laws.
The petition did not specifically endorse a competing offer from a partnership that includes Dow Jones & Co., but it said any deal in the same price range as the NBC proposal would be preferable.
NBC operates the Consumer News and Business Channel, the only other cable TV channel devoted primarily to financial news. CNBC reaches about 18 million cable subscribers, while FNN reaches about 35 million.
Financial News Network Inc. agreed to sell its cable channel and other media assets to the NBC division last month, after CNBC topped an offer estimated at $90 million from a joint venture of Dow Jones and Group W Satellite Communications.
FNN subsequently filed for protection from its creditors under Chapter 11 of the bankruptcy laws, and the Dow Jones partnership told the court that it would raise its offer to $115 million.
Judge Francis G. Conrad set Monday as the deadline for competing bids and has scheduled a hearing on them for April 3.
The state officials said a merger of FNN and CNBC would eliminate competition, lessen the incentive for product improvement and hike prices paid by cable systems, advertisers and consumers.
Another bidder would pose fewer legal risks and better serve the interests of the public and FNN’s creditors, according to the petition.
“Publicly available information shows that these two channels are in a unique market and that their competition with each other has served to hold subscription and advertising prices down,” the petition said.
The petition was filed with the bankruptcy court by Preate and Delaware Atty. Gen. Charles M. Oberly III on behalf of themselves and 13 other states.