Liberty Stake in News Corp. Expected Not to Be Resolved This Year

Aug 5, 2005  •  Post A Comment

Liberty Media Chairman John Malone said Friday that he did not expect to reach an agreement this year that would reduce Liberty’s stake in Rupert Murdoch’s News Corp., though he indicated that both sides continue to hold talks.

“We continue to be very friendly and hold wide-ranging discussions,” said Mr. Malone during a conference call to discuss Liberty’s second-quarter results. “But we have not been able to identify a large transaction that would be a win for all three parties-the Murdochs, News Corp. and of course Liberty.”

Liberty and News Corp. for months have been holding talks about how News Corp. could get back a portion of Liberty’s stake in News Corp., which doubled late last year to 18 percent while News Corp. was reincorporating into the United States from Australia. Not long after Liberty boosted its stake in News Corp., the Murdoch-controlled company adopted a strategy that would block Liberty or any other shareholder besides the Murdoch family from increasing its stake.

But with neither side able to come up with a transaction that satisfies all involved, Mr. Malone said, Liberty sees itself “as a long-term strategic shareholder of News Corp.” and added that the company has “the best set of assets in the media industry.”

Mr. Malone’s only gripe: He’d like to see News Corp. launch a share buyback program that is larger than the $3.5 billion buyback already under way.

In addition, Mr. Malone declined to comment on the squabbles within the Murdoch family that appeared to lead Mr. Murdoch’s eldest son, News Corp. Deputy Chief Operating Officer Lachlan Murdoch, to step down last month.

“We wish Rupert well, and with respect to his family issues, we all have had those and will not be looking at that as an opportunity,” Mr. Malone said.

Meanwhile, Liberty reported Friday that its second-quarter loss narrowed to $107 million from a year-earlier loss of $314 million, largely thanks to strong results at home-shopping channel QVC and Starz Entertainment Group. Revenue advanced 12 percent to $2 billion.

QVC reported a 15 percent surge in revenue to $1.5 billion, while SEG reported an 8 percent rise in revenue to $258 million.

Discovery Holding, which was spun off into a separately traded company last month, disappointed most analysts by reporting flat operating cash flow growth, despite a 12 percent increase in revenue.