Advertisement
YOU ARE HERE: LAT HomeCollections

California and the West

Liberty Says DirecTV Deal Possible

October 13, 2006|From Reuters

NEW YORK — Liberty Media Corp. confirmed Thursday that it might swap its stake in News Corp. for a controlling interest in DirecTV Group Inc., a move that would thrust cable pioneer John Malone into the satellite television arena.

Malone, Liberty Media's chairman, has been in discussions with News Corp. Chairman and Chief Executive Rupert Murdoch over making a swap for Liberty Media's approximately 20% stake in News Corp. since Malone quietly snapped up shares in 2004.

That move had spurred Murdoch to enact a so-called poison pill defense to make a hostile takeover prohibitively expensive.

The two former associates have been unable to resolve the matter. Both have said there is no rush.

"We were saying in the marketplace that we may exchange our roughly $11-billion stake in News Corp. for a controlling stake in DirecTV," Liberty President and Chief Executive Greg Maffei said Thursday at a Shop.org conference.

Media reports of talks involving DirecTV first appeared in September and were seen by Wall Street as a tacit admission by Murdoch that he no longer viewed U.S. satellite TV as a viable, competitive video and information service. Gaining control of DirecTV had been a hard-won deal to help him stitch together a global network of satellite TV distribution.

Publicly, Murdoch has continued to defend the U.S. satellite TV market despite a slowdown in subscriber growth.

Since last year's $580-million purchase of MySpace.com, a social network website popular among teenagers, Murdoch has been talking up the Web, as he now believes that Internet businesses will grow faster than cable networks and newspapers.

For Liberty, Maffei said a stake in DirecTV would help transform the company from a repository for Malone's past investments.

Advertisement
Los Angeles Times Articles
|
|
|