Dow Jones and Group W Drop Bid for FNN

NEW YORK —  Dow Jones & Co. and Group W Broadcasting Co. said Friday that they have abandoned their three-month fight to jointly acquire Financial News Network.

The companies said they ordered their lawyers to drop all legal challenges to the acquisition of FNN by Consumer News and Business Channel, a unit of NBC.

After weighing the competing bids, a federal bankruptcy judge on May 9 declared CNBC the winner. But Dow Jones, Group W and the attorneys general of Pennsylvania and Illinois challenged the decision, contending that the merger of the two competing financial news cable-TV networks would violate antitrust laws.

The attorneys general said Friday that they too are dropping their antitrust challenge. A spokesman for the Illinois official said CNBC had agreed to maintain through 1994 the same rate structure with the state’s cable operators that FNN had.

The end of the legal challenges apparently clears the way for CNBC’s acquisition of FNN for $145 million plus assumption of $9.3 million in debt and an additional payment if CNBC’s and FNN’s combined revenue exceeds $227 million over the next three years. The structure of the Dow Jones/Group W final offer was similar, but the cash portion amounted to only $125 million.

Failure of the Dow Jones/Group W effort is considered a setback especially for Dow Jones, the media conglomerate that publishes the Wall Street Journal and Barron’s. The Journal has been losing circulation and advertising since the 1987 market crash and has said entering the potentially lucrative cable market was a priority.

Roger May, a Dow Jones spokesman, said the partnership with Group W was formed only to acquire FNN and will now be dissolved. He declined to say whether the company has other plans to offer business news on cable. But May stated: “We’ve said all along that TV is something that is in our future and part of our strategic planning.” He declined to say how much the FNN acquisition effort had cost Dow Jones.