Murdoch's Biggest Score

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It started out as a routine encounter between two broadcast bigwigs. On Tuesday afternoon, May 10, Rupert Murdoch welcomed a visitor to his office on the 20th Century Fox lot in Los Angeles: William Bevins, chief executive of Ronald Perelman's New World Communications Group. Murdoch and Bevins talked about each other's company, and the conversation inevitably got around to football. Eight local CBS affiliates owned by New World were about to lose their Sunday-afternoon N.F.L. games thanks to Murdoch, who last December paid $1.58 billion to take them away from CBS and bring them to the Fox network.

"We chatted for an hour or two," Murdoch recalled in an interview with TIME. "I told him that a lot of his stations would lose N.F.L. football and get hurt, and wouldn't it be better if they became affiliates of Fox? I asked if perhaps we could do things together, and gradually over the course of a conversation a big idea developed."

That big idea now has the TV world rocking. After less than two weeks of negotiations, Fox and New World brought about the most sweeping affiliation shake-up in network-television history. In return for an investment of $500 million from Fox, New World agreed to align 12 of its stations -- in such major markets as Detroit, Dallas, Atlanta and Phoenix, Arizona -- with Murdoch's scrappy young network. In each city, Fox will switch from a UHF station (one of those occupying the channel numbers above 13, which historically have had weaker signals and lower viewership) to a stronger VHF outlet (2 through 13 on the dial). It was the boldest move yet in Fox's seven- year effort to achieve parity with ABC, CBS and NBC.

And there may be more to come. Fox expects to pick up 15 other affiliates over the next year, reportedly including the NBC station in San Francisco. "A number of other stations see the operational advantages of moving to Fox," says Preston Padden, head of Fox affiliate relations, "but they had trouble getting over the emotional hurdle of leaving their traditional network. This announcement should help several of them get over that hurdle."

The deal was consummated with startling swiftness and, in the gossipy TV world, unusual secrecy. The negotiations took place while Fox executives were in the midst of putting together their fall programming lineup. "We were running from room to room for about three days, going into meetings and then immediately into screenings, trying to come up with a fall schedule," says Fox Broadcasting chairman Lucie Salhany. "There was food in every conference room. We had pizzas brought in and more deli than you can believe." To that scene was added, in the final days, a cadre of briefcase-toting lawyers who invaded the Fox lot. In the end, Murdoch agreed to pump $500 million into New World in exchange for nonvoting convertible preferred stock and other redeemable securities representing potentially a 20% share of Perelman's company.