BUSINESS

A jewel in the crown

JOHN DALY August 22 1988
BUSINESS

A jewel in the crown

JOHN DALY August 22 1988

A jewel in the crown

BUSINESS

It is the highest price ever paid for a publishing company and the boldest step in a three-year series of acquisitions worth almost $10 billion. Last week, Australian-born media magnate Rupert Murdoch announced that he had agreed to purchase Radnor, Pa.-based Triangle Publications Inc. for $3.7 billion.

Murdoch’s worldwide media empire includes more than 150 publishing and broadcasting ventures in eight countries. The Triangle deal will give him control of TV Guide, the largest-selling weekly magazine in the United States, as well as the Daily Racing Form, a digest for people who bet on horse races, and Seventeen, a fashion magazine for young women. Declared Murdoch: “We plan to make them the cornerstone of a great American publishing company.”

Murdoch’s Sydney, Australia-based News Corp. Ltd. was already carrying a $6.1-billion debt before last week’s dramatic announcement. Despite Triangle’s 1987 profit of nearly $110 million on revenues of $909 million, Murdoch said that he will have to sell either some News Corp. or some Triangle assets to finance the deal. Meanwhile, analysts expressed concern that the purchase will reduce competition in the media. Indeed, through TV Guide, with a U.S. circulation of about 17.1 million, Murdoch—owner of the Fox Broadcasting Co. and six U.S. television stations—will

control the nation’s prime source of news about television. The Canadian edition of TV Guide is domestically owned and will not be affected by the Murdoch purchase.

The mammoth deal was negotiated over five weeks by just three men: Murdoch, New York City investment banker John Veronis and Triangle owner Walter Annenberg, 80, the well-known philanthropist. Veronis told Maclean’s that Annenberg telephoned him on July 5 and told him he wanted to sell Triangle. Veronis met with Murdoch in New York City two days later, and on July 9, the three sat down together for the first time at Annenberg’s home, just outside Philadelphia. The deal was concluded in

Beverly Hills, Calif., on Aug. 9. But although there were no other bids and the purchase price was a record, Veronis said that “it was a good buy, and a good sale.” But last week, analysts speculated as to which assets Murdoch would have to shed in order to finance the deal. Charles Crane, an analyst at PrudentialBache Securities Inc., said that the Daily Racing Form or Seventeen might be slated for sale.

And Andrew Schwartzman, executive director of the Washington-based consumer advocacy group Media Access Project, said that Murdoch could use TV Guide to unfairly promote Fox, the money-losing broadcasting company that he is attempting to

0 turn into a fourth major “ U.S. television network.

1 But Murdoch and a number of other analysts dismissed such concerns. Declared Kendrick Noble, media analyst with the New York City-based brokerage firm Paine Webber Inc.: “Most viewers want to read about the big networks. Nor would it make sense to lose them as advertisers.”

Meanwhile, the 57-year-old Murdoch continues to operate with a lean management team of fewer than a halfdozen top executives. Said Noble: “Murdoch sees five or six major media companies eventually controlling the media around the world, and he wants to be one of those companies.” With the lucrative Triangle jewel in his crown, Murdoch appears destined to reach that goal.

-JOHN DALY