FOX IS FLEXING MUSCLES; MURDOCH TARGETS LAKERS, KINGS.

Byline: Tom Hoffarth Daily News Staff Writer

Feeling local competition from Disney heat up, Rupert Murdoch's effort to buy a minority interest in the Lakers confirms his plan to continue dominating regional sports programming for his Fox Sports cable network.

Murdoch's Fox Group's backdoor approach is to buy a 10-percent piece of the Lakers through a 40-percent purchase of the soon-to-be-constructed Staples Center in downtown Los Angeles. The arena share is in addition to buying a share of the NHL's Kings, which would give Fox that team's option to buy a share of the Lakers, the Los Angeles Times reported Wednesday.

``It has always been our intention to form an alliance between the Staples Center and an entertainment company,''Kings president Tim Leiweke said in a statement Thursday. ``We have had discussions with several organizations including the Fox group. At this time we do not have a formal agreement and as our talks are ongoing, it is not appropriate to talk about.''

Fox, which two weeks ago sealed the deal on full ownership of the Dodgers for $311 million, owns the cable-broadcasting rights to every major professional team in L.A. - the Dodgers, Angels, Lakers, Kings, Ducks and Clippers.

It expects to lose the Angels and Ducks to the new Disney-owned ESPN West regional channel, slated to launch in 1999. Both the Angels and Ducks are owned by the Disney Corp., which under the Cap Cities umbrella also owns ABC and ESPN. But keeping an interest in as many teams as possible through ownership - either majority or minority - is Murdoch's method based in practical business theory.

``It is beginning to make more business sense for the team and the regional sports network to join interests, particularly when there are two separate regional networks who could compete for broadcast rights to one team like in Los Angeles,'' said John Mansell, senior analyst at Paul Kagan Associates, a leading media-research firm.

``There is much more vertical integration within sports and it makes more sense with advertisers who can do one-stop shopping with a team, a network and an arena. It's a good situation for the seller of advertising, who can then create a tremendous amount of leverage.''

Does that make it bad for the fan?

``As long as ticket prices and cable bills don't go up, I'm not sure any of this matters to the fan,'' said Mansell. ``All these business dealings are necessary to continue paying the athlete's salaries.''

Mansell cited the bidding war that took place for the New York Yankees' TV rights in the late 1980s between Madison Square Garden Network and Jack Dolan's Cablevision. The result was a 12-year package for the Yankees with MSG that this year pays the team more than $50 million a season, far and away the most a team earns from a single cable outlet. There is also talk lately about Cablevision trying to purchase the Yankees from George Steinbrenner.

In Chicago, Miami and Boston, a partnership between the team owner and the cable-TV system that shows the games is also in place.

Fox has clearly signaled its intention to get head-to-head with Disney for control of as many of the local pro sports franchises as possible.

The Ducks' contract with Fox Sports West is up after this season and the team will move to ESPN West next season. The Angels have a year commitment left with Fox Sports West for 40 games. ESPN West will also get a package of Angels games in 1999, as will KCAL Channel 9. In 2000, ESPN West and KCAL will split the package.

The Lakers and Kings are both involved in Fox contracts for another seven years, through the 2004-2005 seasons. The Clippers, a team that could go either way in this Fox-Disney battle, is in the second year of a five-year deal with Fox Sports West 2, ending with the 2000-2001 season.

``From what I can gather, Murdoch looks at the TV rights as being more valuable than the property and teams,'' said Abraham Madkour, editor in chief of the Sports Business Daily.

``With ESPN West lurking in the distance, having a minority stake in any team in Los Angeles guarantees some influence over what cable network they end up on. Fox Sports West 2 isn't going to fill its programming with indoor lacrosse, so the next level is to get a hand in each cookie jar. It behooves them to be a player in as many interests as they can.''

There is also speculation that Fox's involvement with the Staples Center will form a Murdoch alignment with Kings owners Philip Anschutz and Edward Roski Jr., who are building the downtown arena.

Roski heads the new Coliseum partnership that is trying to lure an NFL team to Los Angeles.

Fox, which also has a huge investment in televising the NFL on its over-the-air network, says it is currently not pursuing ownership of an L.A.-based NFL team. But the fact the nation's second-largest TV market could have a team again would seem to benefit Fox.

Roski and Anschutz have been looking for assistance to cover some of their costs both in construction and paying for the Kings. The two paid some $116 million for the Kings and the team has yet to have a profitable season.

Despite the amounts announced for the naming rights of the arena, the money from Staples office supplies has not come in yet and is to be paid out over several years and not in a lump sum.

Staff writer Michael Rosenthal contributed to this story.

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Photo: (Color) Rupert Murdoch