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New Shell game

Looking for leverage with operators and advertisers, News Corp. organizes its Fox cable networks into one division 4/23/2000 08:00:00 PM Eastern

News Corp. has put its FOX cable holdings under one Shell, reorganizing under a new division headed by FOX Sports Network chief Jeff Shell.

Shell, president of FOX Sports Networks for the past year, has been bumped up to president and CEO of the newly created FOX Cable Networks, taking on oversight of FX, FOX Movie Channel, National Geographic Channel and the company's interest in both The Health Network and FOX Family Channel. He will continue to oversee national advertising sales, distribution and local rights negotiations for the cable sports business, working closely with FOX Sports CEO David Hill to run FOX Sports Net.

FOX News and the FOX News Channel will continue as a separate division, reporting directly to FOX Entertainment Group.

The reorganization, Shell says, was done for a handful of reasons-most important, to maintain leverage with cable operators and advertisers in the coming digital age. "With the operators consolidating," he explains. "I think we need to think harder and longer about how we can benefit from the fact that we have all of these digital cable channels."

FOX Sports Networks is experiencing strong revenue growth this year, but Shell is taking on some problem children. FOX Family has seen a major ratings slide, FX's operations have been mixed, FOX Movies has never gotten strong distibution and FOX Health is the combination of two broken health channels.

FOX Cable Networks becomes one of the four major arms of the FOX Entertainment Group, joining the movie studio, TV network/studios and the FOX TV Stations group. FOX got involved in the cable side of the television business in 1994 with the launch of FX. Now it owns outright or has interest in 22 networks, including ownership stakes in The Golf Channel, Speedvision, Outdoor Life, the various FOX Sports Net channels, and a partnership with Cablevision's MSG Networks.

The new FOX Cable structure, Shell says, should help pare costs and boost productivity. "We have this big infrastructure that is serving a bunch of different channels, so theoretically you should be able to get savings and benefits out of this. I think there is going to be renewed focus on how we take all of this content to the next level."

He had been president of FOX Sports Networks since early 1999, when News Corp. acquired Liberty Media's 50% interest in the two companies' sports partnership. Shell joined FOX in 1994, running new-business development for FOX Television. A year later, he helped broker Fox's original partnership with Liberty Media and was named CFO of Fox/Liberty Networks.

March