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Rupert’s Gambit

You can count on one hand the number of media moguls you bet against at your own risk. Atop the list is doubtless News Corp chairman Rupert Murdoch, who last week cemented his standing by locking down the $5 billion-plus purchase of Dow Jones and its centerpiece, the Wall Street Journal.

In the wake of that acquisition, bookmakers certainly shifted the over/under for Murdoch, and cronies Roger Ailes and Neil Cavuto, making a real go of it with their coming gambit, the Fox Business Network (FBN), slated to launch October 15 in 30 million homes. Even though the Dow Jones merger is still pending a shareholder vote, there was already much industry buzz over how FBN would end-run a long-standing pact CNBC now enjoys with the Journal, set to run until 2012, with the channel using the resources of that venerable brand on reports.

Whatever happens, you can bet Murdoch will use his far-flung resources to cross-promote the Journal and FBN, hoping to graft the blue-chip newspaper brand on his newbie network. But it’s vital that FBN and the Journal show independent voices in their reporting and stay free of partisanship beyond what’s clearly labeled opinion. That’s the bulk of the baggage for Fox News: For all the “fair and balanced” marketing, it’s still perceived by a lot of folks as being anything but.

Indeed, as soon as it’s humanly—and legally—possible, I’d rechristen the Fox Business Network as the Wall Street Journal Network. Given the Journal/CNBC deal, there’s some question about when News Corp. could buy that OK, but the sooner the better.

The potential prize is enormous if FBN is a hit. Wall Street analysts peg the break-up value of CNBC at easily north of $4 billion; and Fox News, which, when it launched in 1996 was considered by most, including yours truly, a long shot at success, is a 10-figure asset as well. If the plan to turbo-charge FBN into profitability works, the billions Murdoch shelled out for Dow Jones won’t look like such a premium.

This hardly means FBN is a lock, however. CNBC has long dominated business news on the tube and Bloomberg Television is doing quite nicely, thanks. Murdoch may be a titan and Ailes one of the savviest programmers around, but even with the Wall Street Journal in the family, they still face a craggy uphill battle. True, they’ve beaten long odds before, but they’ve also taken their hits. If you recall, News Corp. made an unsuccessful play to build a handful of regional sports networks into a national competitor to go after ESPN a few years back. You can bet he remembers it.

Ailes, who successfully spearheaded CNBC before taking the reins at Fox News 11 years ago, has no illusions about the fight ahead. He’s already faced the daunting challenge of trying to program in prime time when, historically, there’s been little appetite for business news. Your World with Neil Cavuto on Fox News might deliver better ratings than anything on CNBC during the day. But in general, the fickle, coveted audiences advertisers pay plenty to reach on CNBC tend to be creatures of habit. Not to mention this: The number of viewers tuning into financial news is finite. FBN’s path to success is predicated on grabbing significant share from a seemingly finite pie.

If Murdoch and company play it smart, which they usually do, FBN has a real shot. But success will require a balancing act: Managing the Wall Street Journal’s tradition of editorial independence, and building co-brand equity. Regardless of the odds, we wouldn’t bet on his crapping out.

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