Murdoch Will Launch 24-Hour News Channel

In the latest challenge to CNN, News Corp. Chairman Rupert Murdoch outlined plans for a new 24-hour news channel he said will be launched by the end of the year.

Murdoch said Roger Ailes, the former president of NBC’s CNBC cable network, will be chief executive for the channel and will also oversee Fox News, the news division of News Corp.’s Fox TV network.

Murdoch said at a news conference here that Fox will spend $80 million a year on the news operation and that the channel will be offered on cable, satellite and even broadcast television to gain distribution.

The offering from Fox will join upcoming cable news channels from NBC and ABC in trying to take a bite out of CNN’s $240-million annual profit and 167 million subscribers worldwide.

Fox will be starting virtually from scratch in building a network news division in this country. Murdoch acknowledged that the new service, like other CNN competitors, will have problems gaining distribution on crowded cable systems in the United States.

But Murdoch said the Fox channel will have the potential to reach “two-thirds of the world” by being offered over Star TV, the Asian satellite TV service Murdoch owns, as well as via other satellite services around the world. News Corp. has a 40% interest in Sky Television, a satellite broadcast service in Europe.

Murdoch praised the “entrepreneurial spirit” and record of Ailes, who built CNBC, a business news and talk channel, into a network making an estimated $80 million a year in profit for NBC.

Ailes resigned from NBC two weeks ago, after the network decided to replace its second cable network, America’s Talking, with its all-news network, MSNBC, a joint venture with Microsoft Corp. Ailes, who was also president of America’s Talking, was known to be unhappy with the change, which left him with only one network to run.

Murdoch said recently that he felt a more conservative cable news network was needed to counter the “liberal” CNN. Ailes, a veteran TV producer who joined NBC in 1993, has also worked as a strategist and media consultant for Republican presidential candidates.

Ailes said the new network will not have a political bias. “We’re not starting up a reactive news service in any way,” he said. “Our job is to be objective, to do fine journalism.”

Ailes said the new network “would like to restore objectivity where we find it lacking.” But he noted: “I left politics a number of years ago and have run a news organization for the past two years. We just expect to do fine, balanced journalism.”

Ailes said the network will draw on the “younger demographic” of Fox stations but will be a broad-based news network. Fox News, the nascent division that has begun opening bureaus and providing news footage to Fox affiliates under news President Joseph Peyronnin, will now report to Ailes.

Murdoch acknowledged NBC’s advantage in being able to use the 17-million-subscriber base of America’s Talking to launch MSNBC by the end of this year. But he implied that Fox may use its negotiations with cable operators over retransmitting Fox programming as a bargaining chip to get cable operators to take the all-news Fox channel.

“I don’t believe people want to lose . . . [NFL football] for the sake of not having room” on their cable systems for Fox’s all-news network, Murdoch said.