A deal by Rupert Murdoch to take control of DirecTV, the leading US satellite television company, has reportedly been approved.

The board of General Motors, the current owner of the satellite operation, has agreed to the $70bn deal in principle but will take another two weeks to finalise it, according to the news agency Reuters.

The deal would be the biggest of Mr Murdoch's long and high-profile career.

It would involve a merger of the media magnate's Sky Global Networks with Hughes, the General Motors subsidiary that currently controls DirecTV.

Mr Murdoch would become chairman of the combined group.

On Wednesday, the Financial Times newspaper also reported that the deal was close to being finalised.

The news came as Mr Murdoch's News Corporation unveiled better than expected profits but said it had taken a one-off loss of $293m from dismantling or writing off internet-related joint ventures and investments.

Microsoft investment

The FT said software giant Microsoft would invest $4bn-$5bn in the new DirecTV-Sky group and play a significant role in developing new technology and products.

Another likely investor was John Malone, the chairman of Liberty Media, the newspaper said.

Under the terms of a complicated deal, Sky Global would initially account for 35% of the combined group, with 65% for Hughes.

Panamsat - Hughes' commercial satellite operator - would then be sold for $6.5bn-$7bn, following which GM would be bought out for about $8bn.

This would leave Mr Murdoch's News Corp as the group's largest single shareholder, the FT said.

Conspicuous absence

Mr Murdoch's media empire includes satellite television assets such as Star TV in Asia and British Sky Broadcasting as well as stakes in pay TV operators in Germany, Italy and Latin America.

A combination with DirecTV would add almost 10 million subscribers in the US and entry to a satellite market from which Mr Murdoch has so far been conspicuous by his absence.

It would require board approval by News Corp, Hughes and GM.

News Corp beats forecasts

News Corp on Wednesday reported second-quarter operating profits up 7% to $270m despite falling advertising revenue at the Fox Television stations.

The figure beat analyst expectations, partly because of unexpectedly strong video sales of the film X-Men.

Revenues were flat at $3.85bn.

The results included a one-off charge of $293m associated with the ending or write-offs of internet-related joint ventures and investments.

In a later conference call with analysts, Mr Murdoch said that second-half revenues for News Corp's TV stations would be 8-9% lower in 2001 than a year previously because of the weakening advertising market.

BSkyB posts losses

BSkyB reported widening pre-tax losses for the six months to 31 December 2000 of £112m ($164m).

In the same period of 1999 BSkyB had reported a pre-tax loss of £61.5m.

In a statement, BSkyB also said it planned to write off £25m, linked to new media investments.

The pay-TV operator said its direct subscriber sales jumped to 5.25 million as of 6 February, while total subscribers reached 9.75 million.

Operating profits came in towards the top end of analyst expectations at £50.6m from a previous £28m.

Revenues rose 28% to £1.086bn.