News Corp. to Give Disney a Break on Price of Fox Kids

News Corp. has agreed to give Walt Disney Co. a slight break on the price of Fox Kids Worldwide. Instead of paying $3 billion in cash, Disney will pay about $2.9 billion, in addition to assuming debt of $2.3 billion, according to sources close to the negotiations.

As a result of the adjustment, the deal could be completed as early as this week, sources say.

That means Disney will take charge of Fox Kids’ channels worldwide, including the flagship Fox Family channel in the U.S. Disney plans to rename the channel ABC Family and use it as a secondary outlet for network programming.

Neither company would comment Monday on the revisions.

Disney has been trying to use the unforeseen circumstances of Sept. 11 to restructure terms of the Fox Kids transaction, which was struck in July. Sources say Disney was demanding a $500-million price break from News Corp.

Disney was hit harder than other media concerns by the terrorist attacks. A slowdown in travel has hurt attendance at Disney’s theme parks. The company already was struggling as a result of an advertising slump at ABC and Disney’s cable channels.

Although News Corp. has maintained that its agreement with Disney is binding and nonnegotiable, sources at the company say they agreed to concessions to keep Disney from slowing down completion of the deal.

In weekend negotiations, News Corp. agreed to give Disney slightly less than $100 million off the original price and to other undisclosed but modest concessions.

News Corp. is counting on using the cash proceeds from the sale to buy Hughes Electronics Corp., owner of the DirecTV satellite service. Hughes and News Corp. have been negotiating the deal for more than a year.

However, News Corp. doesn’t pocket all the proceeds. About half of the take goes to News Corp.’s 50-50 partner, cartoon entrepreneur Haim Saban. With completion of the deal, Saban becomes the latest cable programming billionaire.

Earlier this year, Robert Johnson took in about $1.5 billion from the sale to Viacom Inc. of his interest in Black Entertainment Television, the cable programming empire he founded.

Conglomerates such as Disney and Viacom have been willing to pay high premiums for cable assets that are enormously profitable and difficult to duplicate in today’s crowded media marketplace. Even with the slight price break, Disney is paying close to a record price for Fox Kids.