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SYDNEY-Media baron Rupert Murdoch might sell his Australian newspapers if he's forced to shift News Corp.'s home base to the U.S. to comply with Federal Communications Commission rules.

That would become the sacrifice for his being able to keep 18 U.S. TV stations.

Since the FCC limits foreign companies to a 25% stake in U.S. TV stations, analysts say Mr. Murdoch would seriously consider the move due to the commission's inquiry into whether Fox is a foreign company because it's controlled by News Corp.

If the FCC decides Fox is a foreign company, Mr. Murdoch's simplest solution would be moving News Corp. to the U.S., they say.

Mr. Murdoch controls 76% of Fox's voting interest. He created the network after paying John Kluge $2.7 billion for some stations in 1985. That same year, he became a U.S. citizen to meet FCC regulations limiting foreign ownership.

But most of the funding for Mr. Murdoch's U.S. purchases comes from the Australian News Corp., including Fox's $500 million deal last month with New World Communications Group, snapping up 12 stations, including eight previously affiliated with CBS (AA, May 30, ).

Fox structured the New World deal by buying non-voting shares, so Fox wouldn't be defined as an owner of the New World stations.

The FCC is now reviewing the deal, because the combined Fox-New World group controls 18 stations with a reach of 30%-plus of the U.S. FCC rules forbid a network from owning more than 12 stations with a reach of more than 25% of U.S. households.

If News Corp. became a U.S. company, it would face political and regulatory problems in Australia as a foreign company dominating several Australian newspaper markets, forcing a sale so that Mr. Murdoch holds no more than a 20% to 25% interest.

Mr. Murdoch's 15% stake in Australia's Seven Network TV wouldn't be affected, since foreign investors are allowed up to that amount.

"If it comes to a choice between Australian newspapers and Fox," said Prudential Bache media analyst Mike Mangan, "we believe the company will certainly choose Fox."

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