New World Will Buy Cannell to Help Fill Fox’s Program Needs

After months of speculation, New World Communications Group Inc. announced Thursday that it plans to buy Los Angeles-based Cannell Entertainment for $30 million.

The move to buy the production company behind ABC’s “The Commish” and USA Network’s “Silk Stalkings” will help New York-based New World fulfill a programming commitment made last year when the company agreed to convert 10 of its television stations from CBS, NBC and ABC affiliates to the Fox Network.

The deal would also reunite Cannell Entertainment President Stephen Cannell with Brandon Tartikoff, chairman of New World Entertainment, the Los Angeles-based programming subsidiary of New World Communications Group. The two worked together in the 1980s, when Tartikoff was chairman of NBC Entertainment and Cannell produced “The A-Team” and “Hunter” for the network.

New World’s demand for programming has grown since converting its stations because Fox has fewer hours of network programming during the daytime and late-night hours, Tartikoff said. Cannell Entertainment has at least eight hourlong programs in production or development, he said.

Analysts have anticipated the acquisition since December, expecting a deal valued at $50 million to $100 million. The purchase price is lower because Cannell decided to maintain control over his library of television shows and make a long-term distribution commitment with New World, he said.

The deal is expected to be completed in the next couple of months. The price for Cannell’s privately held production company will be payable in New World Communications Group convertible securities.

Last May, New World shook up the the television industry when it agreed to flip 10 affiliates--eight from CBS and one each from NBC and ABC--to Fox in exchange for a $500 million investment by Rupert Murdoch, chairman and CEO of Fox’s parent, News Corp. of Sydney, Australia.