Liberty Media in talks with News Corp. over potential asset swap
NEW YORK – John Malone’s Liberty Media Corp. said swapping the company’s stake in Rupert Murdoch’s News Corp. for an operating asset such as satellite television operator DirecTV would be “attractive” and bolster its ability to distribute media content such as television shows and movies, a Liberty official said Wednesday.Liberty CEO and President Greg Maffei told an investor conference would not comment on the status of any talks between the two companies, but said his side wasn’t in any hurry to get a deal done because of a recent run-up in News Corp. shares.On Monday, News Corp. Chief Operating Officer Peter Chernin said discussions about DirecTV were ongoing. News Corp. owns about 39 percent of the satellite TV operator.”I’ll let Peter do the talking for everybody, that seems to be News’ specialty,” Maffei said.Liberty quickly acquired a 19 percent stake in News Corp. in recent quarters, and Murdoch has made no secret of his desire to reduce Malone’s influence on his media empire. That sparked talk of an asset swap.Maffei said that while his company is “enthused with the long-term prospects” of the equity stake in News Corp., “it is a passive asset that we are unlikely to get full market value for.”If Liberty were to sell the stake outright, it would have to pay taxes on any profits. But by swapping the interest for an operating asset such as DirecTV, Liberty would reduce its tax liability.”If we are able to trade for operating business and higher tax basis, that’s attractive,” Maffei said.”DirecTV adds value potentially to other elements in our portfolio. We have content assets but we don’t have the distribution muscle we used to have,” he said, pointing out Malone’s start with cable company TCI.Maffei said his company would have some operating influence over DirecTV even though it would not hold a majority stake, noting that a 39 percent stake would likely include some seats on the board. He said he did not know if Liberty would try to get “hard” control of the property. “The run in Direct’s stock makes increasing the stake not an attractive opportunity right now,” he said.
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