MCI Weighs Options on Satellite TV Venture

MCI Communications Corp. said it is considering selling a portion of its new satellite venture with News Corp. to the public, although it has no immediate plans to do so.

Douglas Maine, MCI’s chief financial officer, told a Wall Street analyst that the company was mulling a number of options for financing the estimated $1-billion to $1.5-billion cost of building and launching a nationwide satellite TV service that would compete with cable to provide movies, sporting events and other fare.

MCI spokesman Robert Stewart said Friday that the company could afford to finance the project internally and was responding to a query from an analyst about its financial options.

On Thursday, a unit of MCI beat out Echostar Corp. and a subsidiary of cable giant Tele-Communications Inc. to win a license to offer the new nationwide satellite TV service. Its winning bid was $682.5 million.

Published reports Friday said News Corp., a partner of MCI in the satellite venture, was talking with TCI President John Malone about TCI joining the venture.

News Corp. officials moved quickly to deny the reports, saying that MCI and News Corp. were legally prohibited from having discussions with TCI or any other satellite bidder until they submitted a 20% deposit on their winning bid to the Federal Communications Commission.

“These reports are totally false,” said Peggy Binzel, a senior vice president at News Corp. “There are no current discussions.”

A legal advisor to Rupert Murdoch, chairman of News Corp., noted that TCI had already built two satellites in anticipation of winning the auction for the satellite broadcast license. “Malone’s sitting there with two satellites, and I guess people are just speculating about what he might do with them,” the advisor said.

Murdoch and Malone have worked closely together before.

News Corp. last year formed a satellite partnership with TCI as well as Globo Organization, Brazil’s biggest media company, and Mexico’s biggest broadcaster, Grupo Televisa. In November, the partnership launched a broadcast TV satellite to serve Latin America.

But relations between the two media moguls grew more strained when Primestar Partners, a satellite operation in which TCI has an interest, sued to block MCI and News Corp. from participating in this week’s satellite auction.

The lawsuit is pending in federal appeals court. A decision is expected in March.