Deal Makes Fox Strongest TV Group

The Federal Communications Commission approved News Corp.’s $4.4-billion acquisition of rival broadcaster Chris-Craft Industries Inc., in a contentious 3-2 vote that followed nearly a year of intense scrutiny.

The acquisition makes Rupert Murdoch’s Fox television group the most powerful in the nation, with 33 stations reaching 41% of the nation’s households and two outlets in the largest two markets--Los Angeles and New York.

The deal touched off a bitter political squabble among FCC commissioners because the combined company would be in violation of at least three rules governing media concentration. Chairman Michael K. Powell has vowed to eliminate many of the remaining restrictions on media ownership.

Sallie Hofmeister and Jube Shiver Jr.

Economic Growth Weakest in 8 Years

Economic growth slowed to a 0.7% annual rate in the second quarter as businesses slashed investment spending and consumers bought more cautiously, the Commerce Department said. It was the economy’s weakest performance in eight years and contrasted sharply with the 4%-plus growth rates that the nation came to expect in the late 1990s. Economists were expecting a slightly stronger growth rate of 0.9%.

Analysts were particularly taken aback by a steep 14.5% drop in business equipment and software investment. The tumble contrasted sharply with the 20% increases of only a few years ago, when it appeared that corporate America was in the midst of remaking itself--and the economy--in a new, high-tech image.

Peter G. Gosselin

L.A. Council OKs Cable Competition

The Los Angeles City Council cleared the way for the first head-to-head competition in the cable television business citywide--a move that could lead to lower rates and better service.

The council approved on a 12-2 vote plans by Western Integrated Networks to build a fiber-optic network for delivering cable television, high-speed Internet access and telephone service to the city’s 3.4 million residents. Mayor James K. Hahn is expected to approve the proposal.

WINfirst plans to begin construction as early as this year and start providing service to its first customers 12 to 18 months after breaking ground.

Critics of the plan have questioned whether WINfirst, founded just two years ago, has the financial wherewithal to complete the eight-year project.

Sallie Hofmeister

United, US Airways Abandon Merger

UAL Corp.’s United Airlines and US Airways Group abandoned their bid to join forces and create the world’s biggest carrier after the Justice Department said it would go to court to block the deal.

Federal antitrust regulators had concluded that the proposed merger, the largest in airline history, would raise fares, limit access and create a near-monopoly in about 30 markets.

Executives at United actually may be relieved, because they had expressed second thoughts about the deal in recent months and will have a way to get out of it, analysts said.

The Justice Department’s decision carries broader ramifications for the airline industry as a whole, putting a chill on talk of consolidations by struggling carriers.

Eric Lichtblau

Tech Companies Slash Jobs as Revenues Fall

Beleaguered technology companies slashed tens of thousands of workers from their payrolls in an effort to keep costs in line with plummeting revenues.

On Thursday alone, tech stalwarts ranging from Hewlett-Packard Co. to Alcatel reported a total of more than 32,000 layoffs, perhaps the single-worst day of job cutting since the tech bubble burst more than a year ago.

The day’s tally included 7,000 more cuts at JDS Uniphase, which also posted an unexpected quarterly loss.

Earlier in the week, troubled Lucent Technologies Inc., which already had announced 19,000 layoffs this year, said it would cut up to 20,000 more workers as it reported a bigger loss than analysts’ average estimate.

Karen Kaplan

Ford Tweaks Top Posts to Spur Power-Sharing

The management realignment was more a tweak than a reshuffling, but it had a significant impact: Ford Motor Co. Chairman William Clay Ford Jr. was brought closer to front and center of running the corporation with the establishment of an Office of the Chairman and CEO, in effect a power-sharing arrangement with President and Chief Executive Jacques Nasser.

After a woeful year in which the auto maker was hammered by losses from the Firestone tire recalls, botched product launches, declining quality and productivity and loss of market share, Ford’s board apparently decided it was too much for one person to handle.

Terril Yue Jones

OPEC Cuts Production For 3rd Time This Year

For the third time this year, the Organization of Petroleum Exporting Countries reduced its production in a bid to keep crude-oil prices in its desired range of $22 to $28 a barrel. The move threatens to add upward momentum to global prices not only of crude, but of gasoline, jet fuel and other refined products.

President Bush warned that the cartel’s action also could crimp the U.S. economy’s ability to recover from its sluggish growth. The 11-member group said it plans to shave production by 1 million barrels a day, to 23.2 million, as of Sept. 1, and it has now slashed its output by 13% this year.

James F. Peltz

Employers to Deposit Wages on Plastic Cards

Visa USA and four major banks are rolling out a prepaid card that can replace paychecks for workers who don’t have bank accounts.

Employers “deposit” employee wages onto the cards, and workers can use the plastic to withdraw cash at ATMs or pay for purchases at stores that accept Visa credit cards.

Consumer advocates cautiously applauded the cards as an alternative to check-cashing outlets.

Bank of America Corp., Bank One Corp., FleetBoston Financial Corp. and U.S. Bancorp plan to make the cards available to employers starting this fall. Workers will have the choice of accepting the cards or continuing to receive traditional paychecks.

Liz Pulliam Weston

Amazon’s Sales Fall Short of Forecast

Amazon.com, the great growth story of the Internet’s go-go days, isn’t growing much anymore. The retailer said sales in the second quarter came in short of expectations and would continue to disappoint for the rest of the year. Investors immediately shaved 25% off the company’s market value, even though Amazon posted a smaller-than-forecast loss for the quarter.

Meanwhile, financial documents revealed that AOL Time Warner Inc., the world’s biggest media and Internet company, invested $100 million in Amazon and left the door open to making an offer for the whole operation. Both companies declined to comment. Amazon’s shares ended the week at $12.25, down 8 cents on Nasdaq.

David Streitfeld

Verizon Urges U.S. to Settle Wireless Dispute

Verizon Wireless and four other winning bidders in an auction of wireless airwaves urged the government to pay up to $5 billion to a disgruntled bidder so the remaining firms can keep their airwaves.

The proposal came a month after a federal appeals court revoked the Federal Communication Commission’s January sale of wireless phone airwaves to Verizon and 20 other carriers and ordered them returned to bankrupt NextWave Telecom Inc. The FCC repossessed the airwaves when NextWave, which bid $4.7 billion for them in 1996, could not make its payments.

The agency said it’s reviewing the proposal, which would leave the government with the remaining $12 billion to $13 billion raised in the auction.

Jube Shiver Jr.

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Please see Monday’s Business section for a preview of the week’s events.

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Earnings Reports

A sampling of companies reporting quarterly earnings Wednesday, ranked by year-over-year earnings-per-share (EPS) growth, compiled by First Call/Thomson Financial.

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Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit.

For more information on First Call, check www.firstcall.com.