Fox Business Channel May Not Have Access to 'WSJ' Until 2012

By: E&P Staff News Corp.'s agreement to acquire Dow Jones should be "a positive catalyst, as it may allow News Corp. to exit 'deal purgatory,'" wrote Merrill Lynch broadcast analyst Jessica Reif Cohen in a note to investors today. However, News Corp. might have to be patient about that synergy involving The Wall Street Journal and the new Fox Business Channel.

"Our understanding," wrote Reif Cohen and her team, "is that News Corp. will not be able to leverage the Wall Street Journal brand or content in launching the Fox Business Channel given the paper's agreement with CNBC, which lasts through 2012."

There could be synergies in news gathering, printing, and international distribution, though it's "difficult to quantify at this time," according to Merrill Lynch.

She notes the valuation of the transaction estimated to be 17 times 2007 Dow Jones' EBITDA is "difficult to swallow."