Groups Say News Corp. Distorted Data for Chris-Craft Merger Petition

News Corp., owner of Fox Entertainment Group and the New York Post, faces charges of distorting data as it seeks U.S. approval by a Saturday deadline for its $5-billion purchase of Chris-Craft Industries Inc.

A coalition of consumer groups that oppose the merger said News Corp. gave the Federal Communications Commission information about the New York Post’s finances that overstated losses as the company seeks a waiver of broadcast-ownership rules.

“There seemed to be a rather strange division of assets and liabilities between the New York Post and News Corp.,” said Christopher Day, a lawyer representing Consumers Union, the Consumer Federation of America and others. “The financial statements are potentially not on the mark.”

News Corp. wants the FCC to waive rules that prevent a broadcaster from owning a newspaper in the same market, a step required before the Sydney-based company can buy Chris-Craft, which owns WWOR-TV Channel 9 in New York and other big-city stations.

An FCC split between Republicans and Democrats makes it tough for Republican Chairman Michael Powell to push through approval for the creation of the largest U.S. television group. A self-imposed time limit for merger reviews expires Saturday unless the FCC stops the clock, which has happened before.

News Corp. spokesman Andrew Butcher defended the information the company gave the FCC as true and accurate.

“If there are any questions about the Post’s figures, I’m sure the FCC will ask those questions,” Butcher said. “Are [the consumer groups] suggesting the Post is a profitable enterprise? I only wish it were so.”

At News Corp.’s request, the FCC granted confidentiality to the financial information submitted. Day’s group, the Georgetown University Law Center, received the data only after swearing to keep it confidential, so parts of the group’s 17-page filing are redacted.

Chris-Craft shares fell 11 cents to $71.48 on the New York Stock Exchange. News Corp.’s American depositary receipts, each of which represents four ordinary shares, rose 21 cents to $38.96 on the NYSE.

The companies last month won Justice Department approval for the transaction on the condition that New York-based Chris-Craft sell KTVX-TV in Salt Lake City.

Even though News Corp. already owned WNYW-TV Channel 5, the company received the waiver to buy the New York Post because it was a bankrupt newspaper.

The FCC today will consider a proposed rule relaxing the restriction on newspaper-broadcast cross-ownership. News Corp. wants a waiver at least until a decision on the rule is made.

News Corp. also wants FCC waivers so it can exceed a 35% limit on the number of households that a company’s TV stations can reach and to own two stations in a single market, so-called duopolies. The company, along with Viacom Inc., is challenging the 35% restriction in federal court.