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Al-Jazeera pays $500M for Current TV

Thursday - 1/3/2013, 6:43pm  ET

By RYAN NAKASHIMA
AP Business Writer

LOS ANGELES (AP) - Al-Jazeera has a growing reputation for serious news gathering and its reporters have won some of the biggest awards in journalism. What the Pan-Arab news network doesn't have is a significant presence in the U.S.

That's about to change now that Al-Jazeera is spending $500 million to acquire Current TV, the left-leaning cable news network co-founded by former Vice President Al Gore. The deal gives Al-Jazeera access to about 50 million homes. As part of an expansion, the network is promising to hire more journalists and double the number of U.S. news bureaus it has.

Still, some big questions remain for Al-Jazeera, which is owned by the government of Qatar: How will it stand out in a crowded field of cable TV news channels? And how can it overcome an image that was cemented for many Americans when it gave voice to Osama Bin Laden in the years following the 9/11 terrorist attacks?

Marwan Kraidy, a professor of communication at the University of Pennsylvania and an expert on Arab media, said Al-Jazeera needs to overcome the perception among some Americans that it is a "toxic brand."

"The U.S. market has been the nut they wanted to crack, and this is why they pursued Current TV so assiduously," he said. "A small country like Qatar has very few tools to exercise global influence, and they've figured out that media is one of these tools."

U.S. resistance to Al-Jazeera isn't logical, Kraidy said, because Qatar's foreign policies "are very much aligned with U.S. policies at the moment."

The network, which will be rebranded Al-Jazeera America in 90 days, isn't likely to make its mark covering U.S. news events. Its expanding coverage of U.S. news may be of more benefit for its 260 million subscribers abroad.

Instead, U.S. viewers may tune in if the news channel can jump into a big international story and repeat the success they had covering the Arab Spring in Egypt and Bahrain, said Al Tompkins, a broadcast and online professor at The Poynter Institute, a journalism school.

"There will be an opportunity for them to have some play in a world story that will unfold, and we'll see if they can step into it and provide something no one else can," Tompkins said. "It only takes a few moments of brilliant work and people start noticing you."

The deal faced an initial setback, as Time Warner Cable Inc. said it will drop Current TV for business reasons, though it left open the possibility of picking up Al-Jazeera America if there is demand.

The nation's second-largest TV operator said the network doesn't have enough viewers at the moment.

"As a service develops, we will evaluate whether it makes sense for our customers to launch the network," said Time Warner Cable spokeswoman Maureen Huff.

An Al-Jazeera spokeswoman said the new network aims to present an "unbiased" view, "representing as many different viewpoints as possible." It is seeking a broad audience, starting from the base of people in the U.S. who have already sought out its coverage online.

Even after it is rebranded, the channel will continue to be carried by DirecTV, Dish Network, Comcast Corp., AT&T U-verse and Verizon FiOS, according to a person familiar with the matter. The person spoke on condition of anonymity and wasn't authorized to speak publicly.

That boosts the reach of Al-Jazeera to about 50 million homes, up from the 4.7 million that could watch Al-Jazeera English, which is available to some subscribers in New York and Washington. That's down slightly from the 60 million homes Current TV was in.

It also amounts to a hefty payday for former Vice President Al Gore and cofounder Joel Hyatt, each of whom had 20 percent stakes in Current. Comcast had less than a 10 percent stake. Another major investor in Current TV was supermarket magnate and entertainment industry investor Ron Burkle, according to information service Capital IQ.

Gore announced the sale Wednesday, saying in a statement that Al-Jazeera shares Current TV's mission "to give voice to those who are not typically heard; to speak truth to power; to provide independent and diverse points of view; and to tell the stories that no one else is telling."

Orville Schell, the former dean of journalism at University of California, Berkeley who was on Current's board, said the sale was justified.

"The reason to sell to Al-Jazeera is that they wished to buy it," Schell said in an email reply to The Associated Press. "Whatever one may think about them, they have become a serious broadcaster that covers the world in an impressively comprehensive way. Time Warner probably dropped the contract because they fear American prejudice."

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