COURT RULING COULD CLEAR MEDIA OWNERSHIP CHANGES.

Byline: Greg Hernandez Staff Writer

A federal appeals court ruling on corporate ownership of television stations will mean a significant reshuffling of the media deck over the course of the next few years, industry experts said Wednesday.

Speculation abounds over such things as what Disney-owned ABC will buy if the rules are changed and how NBC might be affected. Rumors have focused on an AOL Time Warner/NBC union and a Comcast/Disney combination - both scenarios that could now be legally possible. Analysts say that in the new climate, any number of new configurations are possible.

``It is difficult to predict because there are so many new options and so many potential players,'' said Blair Levin, a former Federal Communications Commission chief of staff who is now an analyst with Legg Mason Wood Walker Inc. in Baltimore. ``What is certain is that the reshuffling will probably be the most extensive since the birth of the electronic media. There's going to be a big impact.''

The court has thrown out the FCC's regulations that prevent broadcast and cable operators from owning each other and could clear the way for a conglomerate like AOL Time Warner to acquire a major broadcaster such as NBC or Tribune Co. AOL Time Warner had pressed the legal challenge against the FCC rule.

In addition, the court sent back for reworking a regulation that places a cap on the number of television stations one company can own by saying that a single broadcast company cannot reach more than 35 percent of the audience in the United States.

``There's tons of scenarios,'' said Kaufman Bros. analyst Paul Kim, who follows AOL Time Warner and The Walt Disney Co. ``Comcast and Disney can get together, MGM has always been talked about as an acquisition, Paxson can be bought 100 percent by NBC and AOL can buy Tribune Co. to get all of the WB stations in-house. It's about who wants to sell and who wants to buy.''

Still, Kim calls the court rulings much ado about nothing since, among other things, Fox and Viacom are already in violation of a 35 percent cap.

``Buyers and sellers have already been talking. They just can't agree on a price,'' Kim said. ``Does General Electric want to sell NBC? I'd say no, but anything makes sense at the right price. Right now, I'd say most acquisition targets are already priced accordingly. If those transactions made sense, they would have already been done. I think you'll see more transactions like the one where ABC bought Fox Family, NBC buying Telemundo and Viacom buying KCAL (Channel 9).''

Levin thinks the ramifications could be huge for Disney.

``Disney could become a target of a cable-company acquisition,'' Levin said. ``It could be good news in the sense that someone could buy them for a lot of money. But it could be bad news in the sense that maybe they don't want to be bought.''

Disney officials had no immediate comment Wednesday on the court rulings.

NBC officials applauded the decision in a written statement but also declined to comment on any of the speculation or on how any changes in the rules might impact their situation with Paxson Communications Corp., of which they are a minority owner. Paxson asked the FCC to block NBC's plan to buy the Spanish-language broadcaster Telemundo Communications Group Inc., charging that the deal creates obstacles to NBC buying Paxson.

``We would like to see the relationship ended,'' Paxson Chairman Bud Paxson said this week during a conference call with analysts. Paxson added that the new climate would make his company even more attractive to potential suitors.

Industry analyst Mark R. Fratrik said if the court ruling had been made six months ago, NBC would have bought PAX stations outright.

``It was believed that they were going to be acquired by NBC if the cap was removed, but then NBC went and bought Telemundo,'' said Fratrik of the broadcast research firm BIA Financial in Chantilly, Va. ``Now it's uncertain what the interaction with Pax will be.''