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Rupert Murdoch is reportedly ready to spend only $100 million, a relatively small amount, on the launch of their Fox Business Channel which will challenge the supremacy of CNBC. The source is alleged to be an insider within News Corp. (NWS-A).

The amount is a surprise to some as it seems much to little to gain quick traction. Derek Baine, an analyst at Kagan Research says, "$100 million is not really much to launch a typical cable network. By comparison, News Corp spent $400 million to launch Fox News, and it took about five years to break even."

At a glance this may seem underfinanced, but when News Corp. launched Fox News in 1996, it was also started with a smaller budget as well. With that small budget they're able to demolish their competition who, as in the case of CNN - much better financed.

As far as the costs of the new channel to cable operators, Baine reported it should be somewhere in the 10 to 15 cent range per subscriber on a monthly basis. That is approximately half of what is charged by CNBC. This could definitely cut into the subscription base of CNBC (GE) when it comes time to renew contracts.

It seems to me this is good news rather than bad. If News Corp. can get this going with this small of an expenditure, it bodes well for them as they go forward. It's healthy for a company to run lean and mean. I think it will cause concern for their rivals as the financing shows that News Corp. isn't showing too much respect for them.

According to Baine the company will probably take about four years to break even. The channel is set to launch in October.