Mr Murdoch's News Corporation was forced into talks with PrimeStar after the spectacular implosion of an earlier deal signed in February this year with Denver-based EchoStar. That agreement, which finally fell apart last month, was meant to create a 500-channel satellite joint venture.
PrimeStar, the second-largest satellite-dish broadcaster in the US after DirecTV, is currently owned by the country's biggest cable distributors, including Time Warner. Until yesterday, it had seemed that Time Warner would block any relationship with Mr Murdoch, with whom it has various feuds.
The deal that has now gelled would lead to the creation a new company that would be part ASkyB and part PrimeStar. Mr Murdoch would have a 30 per cent, non-voting stake in the new venture, to which he would contribute the broadcast satellites held jointly by News Corp and MCI Communications.
Importantly, included in the deal would be guaranteed access to the cable systems of the other shareholders, including Time Warner, for Mr Murdoch's Fox television channels, including his fledgling Fox News Channel.
Mr Murdoch's main dispute with Time Warner, which has both camps fighting each other in the courts, centres on Time Warner's refusal to carry the News Channel in New York. It has been given public oxygen by a tirade of personal attacks on Mr Murdoch by Ted Turner. Mr Turner's company, which was ingested by Time Warner, produces CNN, the 24-hour news channel that Fox is targeting.
As part of the PrimeStar agreement, meanwhile, Mr Murdoch would have to indemnify his new partners from any legal challenges from EchoStar.Reuse content