The bids for Cox Communications' (COX) Travel Channel are now valued at more than $900 million and include forming a joint venture that will allow the cable network's owner to retain a minority stake and avoid a hefty tax bill, according to sources familiar with the negotiations.

News Corp. (NWS NWSA) and Scripps Networks Interactive Inc. (SNI) are the lead bidders on a deal that is taking the form of a joint venture - similar to one being discussed regarding NBC Universal - in which the winner would contribute some mix of its own cable network assets and cash to assume majority ownership of a newly-created, private company, sources say.

For its part, Cox will contribute the Travel Channel and hold a minority stake in the new entity. The new company then will take on debt to pay Cox a cash dividend. This structure gives Cox, a unit of Cox Enterprises Inc., a powerful incentive to pick the buyer that not only offers the highest price but also will prove to be the better operator of the Travel Channel.

Such a structure would allow Cox to dodge a steep tax bill left over from the 2007 arrangement it made with media mogul John Malone to swap its interest in Discovery Communications Inc. (DISCA DISCK) for the Travel Channel and other assets. The deal's complexity accounts for the duration of the bidding process, which has been drawn out over months.

The deal's structure echoes the one being discussed by Comcast Corp. (CMCSA) and General Electric Co. (GE) for NBC Universal. In that case, both sides are constrained in their ability to deploy cash in a transaction, due to the global financial crisis and reluctant shareholders.

The rich valuation for the Travel Channel in the face of economic unrest reflects the investment community's enduring appetite for cable networks, with their dual revenue streams of advertising and subscription, despite widespread uncertainty about the future of media in the digital age.

News Corp., which owns this newswire and The Wall Street Journal, will likely contribute the National Geographic Channel, partly owned by the National Geographic Society, to the new venture if it carries the day. News Corp. spokeswoman Teri Everett declined to comment.

Scripps, meanwhile, owns a stable of cable networks, including the Food Network, DIY Network and HGTV. Mark Kroeger, spokesman for Scripps, declined to comment.

Todd Smith, spokesman for Cox, also declined to comment.

David Zaslav, chief executive of Discovery, which still manages advertising and other operations for the Travel Channel, has referred to cable networks as the "beachfront property" of the media industry. His company, while not a bidder for the network, has spoken to private equity firms Thomas H. Lee Partners LP, Kohlberg Kravis Roberts & Co. and Providence Equity Partners about continuing its role in running the channel should one of them buy the network.

Spokesmen for THL and KKR declined to comment while a representative for Providence Equity Partners couldn't be reached.

-By Nat Worden, Dow Jones Newswires; 212-416-2472; nat.worden@dowjones.com