Deal will widen the broadcaster's footprint in the US

Al-Jazeera said on Wednesday it will buy Current TV, the struggling cable channel founded by Al Gore and partners, in a move that will boost the Qatar-based broadcaster's footprint in the United States.

Terms were undisclosed, but analysts estimated the deal could be worth as much as $500 million.

Former US vice-president Al Gore, Current TV chairman and co-founder, takes part in the Television Critics Association Winter Press Tour in Pasadena, California, in January 2012. Danny Moloshok / Associated Press

Al-Jazeera said it will start a US-based news channel with the acquisition, which will make it available in more than 40 million US households, up from 4.7 million before the deal.

The deal brings Al-Jazeera, which operates under the patronage of the emir of Qatar and his family, into closer competition with US news channels like CNN, MSNBC and Fox.

But the award-winning channel, seen in more than 260 million homes in 130 countries, faces hurdles with US distributors and viewers, television industry analysts said.

Current, a liberal channel that has battled low viewership, had been distributed in about 60 million of the 100 million homes in the US with cable or satellite service.

One of its distributors, Time Warner Cable, which accounted for about 12 million of those homes, announced late on Wednesday it was terminating its deal.

"Our agreement with Current has been terminated and we will no longer be carrying the service. We are removing the service as quickly as possible," Time Warner Cable said in a statement.

Reuters reported in April that Time Warner Cable was considering dropping Current if it did not reach certain ratings thresholds.

A spokesman would not elaborate. Current is also distributed by Comcast Corp and DirecTV, with 22.4 million and 19.8 million subscribers.

Comcast or DirecTV were either unavailable or declined to comment. Dish Network Corp also declined to comment.

Current said former US vice-president Gore, its chairman, and co-founder Joel Hyatt, the chief executive officer, will remain on the advisory board.

Analysts said Al-Jazeera will have to overcome a significant image problem in the United States, where many viewers remember its stridently anti-war reporting of the conflicts in Iraq and Afghanistan.

"Al-Jazeera has deeper pockets. The downside is the politics. People in America associate Al-Jazeera with the Muslim world or the Arab world or the Islamic world and they have problems with that," said Jimmy Schaeffler, pay TV consultant at The Carmel Group.

"They have psychological, political and emotional concerns and that will work against them."

Robert Thompson, professor of TV and popular culture at Syracuse University, said, "There's a fair amount of paranoia when it comes to Al-Jazeera."

Al-Jazeera said its new US-based news channel will be separate from Al-Jazeera English, and will provide both domestic and international news for US audiences.

The new channel will air in 2013 and will be headquartered in New York City. In addition to existing bureaus in New York, Washington, Los Angeles, Miami and Chicago, Al-Jazeera will open more bureaus and will double its US-based staff to more than 300.

Current was co-founded in 2005 but never caught on. It shifted to a more liberal format from 2011, but ratings continued to disappoint, said Brad Adgate, senior vice-president of research at Horizon Media, who pegged its average daily audience at under 50,000 viewers and the value of the deal at $400 million to $500 million.

In late October, Current confirmed it was considering selling itself and had hired JP Morgan and the Raine Group to assess options.

Reuters