A DEVILISHLY GOOD DEAL FOR THE FAMILY CHANNEL

By Richard Zoglin

God has "little obligation at the present time to spare America," Pat Robertson announced not long ago on his religious talk show, The 700 Club, "because we are polluting the world with our television programs, with our movies and so forth." Fox Network, part of Rupert Murdoch's News Corp., has long been high on the list of offenders. As early as 1989, Robertson's watchdogs were calling for a boycott of companies that advertised on the raunchy Fox sitcom Married...with Children.

How times have changed. Married...with Children will air its farewell episode this week, after 11 seasons. The 700 Club still has a spot on the Family Channel, Robertson's cable network, but it has been overshadowed by secular fare, such as reruns of Columbo and Rescue 911. Most startling of all, Rupert Murdoch and Pat Robertson are talking about becoming partners. Negotiations are well along--only "technical matters" remain to be resolved, according to one source--for Murdoch to buy a stake in Robertson's International Family Entertainment, parent company of the Family Channel. Although the principals won't comment, Murdoch reportedly would purchase a 30% share of IFE (which has been valued at as much as $1.5 billion), paying for it with preferred stock in News Corp. That would make Robertson a sizable shareholder in a media giant that, even without the Bundys, is one of the most flagrant purveyors of sex (Melrose Place), violence (The X-Files) and ill-mannered humor (The Simpsons) on television.

Whatever moral dislocation it might cause, the deal makes good business sense for both parties. It would accelerate the Family Channel's migration away from predominantly religious fare toward a more eclectic--and higher-rated--schedule. That's one reason the channel, now available in 67 million homes, changed its name in 1989 from the Christian Broadcasting Network. The latter remains the producing arm responsible for Robertson's religious programming.

Murdoch, meanwhile, wants to use the Family Channel as an outlet for Fox's children's programming, thus creating a potent challenger to Viacom's Nickelodeon. "Acquisition of the Family Channel would mark another step in Murdoch's drive to establish a dominant presence in production, packaging and distribution," says Steven Rattner, a media-investment banker at Lazard Freres. "It looks smart."

It would also help compensate for a big Murdoch deal that seems to be falling apart: his joint venture with EchoStar to create a new satellite TV service called Sky. The service, announced with much fanfare in February, would beam 500 channels of digital programming to small home dishes. Because Murdoch's service would have the ability to deliver local over-the-air stations (which other satellite services cannot do), Sky could take significant numbers of customers away from cable. The prospect so alarmed rival media companies that they flooded Washington with lobbyists to try to stop Murdoch on regulatory grounds, since the News Corp. already owns television stations in 22 major markets.

But while the lobbyists were making their rounds, EchoStar executives abruptly announced that negotiations with Murdoch had stalled, stymied by the media mogul's insistence that EchoStar switch to a Murdoch-approved descrambling technology. Some industry observers contend the technology issue is only a smoke screen for other problems faced by the venture. The deal was thrown further into doubt late last week when Preston Padden, Murdoch's top satellite executive, resigned, reportedly after clashing with EchoStar chairman Charles Ergen over control of the venture. "The EchoStar deal left me without a real job," Padden told TIME. "I have nothing but respect and affection for Mr. Murdoch, but I am out of here."

Murdoch is already looking for alternatives to the EchoStar deal. He has held exploratory talks about gaining a share of Primestar, a competing satellite venture owned jointly by several cable companies, including TCI and Time Warner. Last week Murdoch broached the subject in a phone call to Time Warner's vice chairman, Ted Turner (with whom he has been feuding publicly), and had a face-to-face meeting with chairman Gerald Levin. His overtures to link up with Primestar, however, were rebuffed.

Robertson might actually turn out to be a more compatible partner for Murdoch. The two share similar conservative political views. And even though Robertson may be no fan of Fox programming, Murdoch would be unlikely, if he gains control of the Family Channel, to turn it into a clone of Fox. According to those familiar with his thinking, Robertson, the former minister and presidential candidate, now 67, wants to direct his resources to his religious enterprises, including Regent University, the educational institution he founded in Virginia Beach, Va. The News Corp. deal will give him the wherewithal to do that. "From a programming standpoint, Robertson and Murdoch may be at opposite ends of the spectrum," says Bruce Leichtman, a media analyst with the Yankee Group. "But as a business proposition, there are many synergies. This deal makes a lot of sense strategically." Now all it has to do is pass muster with God.

--Reported by Laurence I. Barrett and Adam Zagorin/Washington

With reporting by LAURENCE I. BARRETT AND ADAM ZAGORIN/ WASHINGTON