New World to Sell 2 NBC TV Affiliates for $425 Million

From Reuters

New World Communications Group Inc. on Wednesday agreed to sell two NBC television affiliates for $425 million, leaving it with 10 Fox stations and reigniting speculation it may be taken over by Fox parent News Corp.

New World said it will sell KNSD in San Diego and WVTM in Birmingham, Ala., to National Broadcasting Co. to allow it to focus on the Fox stations, which provide it with more time to run its own programming. Unlike the NBC affiliates, which run network-produced shows during prime viewing hours, the Fox stations are more open for syndicated programs.

New World programs include "Real Stories of the Highway Patrol" and "Tales From the Crypt," and over the last year it has bolstered its creative talent by hiring NBC's former head of programming, Brandon Tartikoff, among others.

Fox, owned by Australia's News Corp., bought a 20% stake in New World for $500 million in 1994 in return for affiliation agreements with New World's TV stations.

Speaking at the company's annual shareholders meeting after the sale was announced, New World Chairman William Bevins did not discuss the merger rumors, but said the company would use sale proceeds to pay off debt and possibly to buy more TV stations.

"We are a ready, willing and able buyer of TV stations," Bevins told shareholders, but added that it was not in any acquisition talks.

Some analysts said the timing of the sale, which was hastily arranged after New World approached NBC, suggested the real motive was to restart stalled merger talks with Rupert Murdoch's News Corp.

Although neither company has commented on the matter, they were widely reported to have held negotiations, which fell apart over a disagreement over a purchase price.

New World shares rose 68.75 cents to $17.4375 on Nasdaq. NBC's parent company, General Electric, was up $1.625 at $84.875 on the New York Stock Exchange.

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