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January 3, 2013

News network al-Jazeera agreed to purchase Current TV, the current affairs channel partly owned by Al Gore, seeking to boost its presence in American television. Financial terms of the deal weren't disclosed, but a person familiar with the matter said al-Jazeera paid a few hundred million dollars for Current TV. The network, which was co-founded by Mr. Gore and entrepreneur Joel Hyatt in 2005, has recently been struggling with low ratings.

Al-Jazeera, which is owned by the government of Qatar, became famous in the U.S. about a decade ago when its Arabic-language outlet aired videos of Osama bin Laden in the wake of the Sept. 11 attacks. Since then the English-language version of the channel, which is available online in the U.S. and on TV in a few cities, has gained plaudits for its international coverage.

The purchase of Current TV could give al-Jazeera national cable distribution in the U.S., something it has been seeking for years. But al-Jazeera doesn't plan to replace Current TV with its English-language channel. Instead it will create a new channel, al-Jazeera America, and will "invest significantly" in new programming, Mr. Hyatt wrote in a note to Current TV staff announcing the deal. The channel will be based in New York and expand al-Jazeera's U.S. staff to more than 300, the company said in an announcement.

Not all cable operators are on board with the change. Time Warner Cable Inc., the second-largest cable operator, said late Wednesday it was dropping Current TV. The network's owners acknowledged the deal was the reason. The deal comes several months after Messrs. Gore and Hyatt, the two largest owners of Current TV, put the channel on the market. Mr. Hyatt said they agreed to sell to al-Jazeera in part because "al-Jazeera was founded with the same goals we had for Current," including "to give voice to those whose voices are not typically heard" and "to speak truth to power." Other suitors who didn't share Current's ideology were rebuffed. Glenn Beck's The Blaze approached Current about buying the channel last year, but was told that "the legacy of who the network goes to is important to us and we are sensitive to networks not aligned with our point of view," according to a person familiar with the negotiations.

Launched in 2005, with a focus on user-generated content, Current has evolved in recent years into a left-leaning professionally produced outlet. But it has struggled to boost its ratings-parting ways with its most prominent host Keith Olbermann last March-and gain broad distribution. Current had 59 million subscribers in 2012, according to SNL Kagan, out of a total pay television universe of about 100 million households. Only about 22,000 households on average tuned into Current TV between January and November. By comparison, since late September, Time Warner Inc.'s CNN has averaged about 700,000 households during primetime with about 1.9 million tuning into Fox News, according to Nielsen. Fox News is a unit of News Corp., owner of The Wall Street Journal.

Current TV's poor ratings threatened its distribution. It has lately been operating under an unusual contract stipulation with Time Warner Cable: It had to meet certain minimum audience thresholds every quarter or risk being dropped. Al-Jazeera believes a new channel has potential because it draws a large U.S. audience on its website. The reputation of al-Jazeera improved in the U.S. during the Arab Spring two years ago, when State Department officials began to praise its coverage and Americans tuned into its online channel. During the Arab Spring, 60% of al-Jazeera English's online viewership came from within the U.S. News of the pending deal was first reported by the New York Times on its website. Wall Street Journal

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