News Corp. to buy Liberty Media's cable interest<BR> Murdoch's firm to gain control of Fox Sports, FX

NEW YORK -- News Corp. plans to expand its cable television reach, buying "substantially all" of Liberty Media Corp.'s portion of a joint venture in a $1.43 billion stock swap.

The Fox/Liberty Network is half-owned by Liberty and half-owned by News Corp. subsidiary Fox Entertainment Group. Under the deal, announced late Monday evening, News Corp. will gain control of regional sports network Fox Sports Net, which reaches more than 62 million households across the United States, entertainment network FX, which reaches more than 39 million households, and other related businesses.Liberty will receive about 51.8 million nonvoting American depositary receipts in News Corp., worth about $1.43 billion based on Monday's closing stock prices on the New York Stock Exchange.

ADRs are used by foreign companies to trade shares on U.S. exchanges.

Once the deal is approved, expected by June, News Corp. will transfer its interest to Fox in exchange for a larger stake in its subsidiary.

"In acquiring Liberty's interest in these properties, News Corporation has firmly established itself as the leader in original cable programming and distribution," said chairman and CEO Rupert Murdoch. "This deal will enable us to leverage more fully the Fox brand across our cable and broadcast properties while giving us added flexibility over our sports and entertainment channels."

News Corp. also said it would buy back 28.2 million nonvoting ADRs from MCI WorldCom for $1.39 billion, then sell half of them to Liberty Media. That will give the Englewood, Colo.-based Liberty an 8 percent stake in News Corp., making it the second largest shareholder.

News Corp. is one of the world's largest media companies with operations in the United States, Canada, the United Kingdom, Australia, Latin America and the Pacific Basin. It had revenue in 1998 of $14 billion.

Liberty Media is a subsidiary of AT&T Corp. and is one of nation's largest providers of cable television programming.

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