Murdoch wins control of the New York Post: News Corp to repay Hirschfeld and take on dollars 20m of debts

A NEW YORK bankruptcy court gave control of the New York Post back to Rupert Murdoch yesterday, five years after he was obliged to sell it because of his acquisition of the Fox Broadcasting network.

Mr Murdoch, who owned the Post from 1976 to 1988, walked back into the newsroom just minutes after the ruling, to the cheers of several hundred employees whose jobs seemed in question only a week ago. Seeing an opportunity to win a waiver of US media ownership rules, Mr Murdoch's News Corp made an unexpected offer to buy the money-losing tabloid last Thursday, and signed an agreement over the weekend with the designated buyer, a New York property developer who seemed bent on closing the paper.

Under the terms of the deal, News Corp will reimburse the developer, Abe Hirschfeld, for the dollars 3m he pledged to buy the Post, and assume responsibility for dollars 20m worth of debts. Mr Murdoch also agreed to cover the Post's operating losses for the next three months - perhaps dollars 2.5m - while he seeks a waiver to allow News Corp to own both the Post and WNYW, the local broadcasting affiliate of its Fox TV network.

'This is a bench order so you can get the presses rolling,' Francis Conrad, the judge hearing the bankruptcy case, said at the conclusion of a brief telephone call with lawyers representing News Corp, Mr Hirschfeld and the Post's creditors.

The parties are to meet again this morning before Justice Conrad to review some minor revisions to News Corp's offer.

Before News Corp can take possession of the paper, it will also have to come to terms with the creditors, the largest of which is Bankers Trust, which had extended a dollars 15m credit line to the Post, backed by the land on which the newspaper's office sit. But lawyers for various creditors said yesterday that it is likely to be some time before a debt plan is finalised.

A spokesman for Mr Murdoch said that Patrick Purcell, president of News Corp's News America subsidiary, is to be the publisher of the Post, while Ken Chandler, an executive producer at Fox and former editor of Newscorp's Boston Herald, would become editor-in-chief. Mr Murdoch told the Post staff that his decision to repurchase the paper was an emotional one.