News Corp., Liberty Confirm Deal

Dec 7, 2006  •  Post A Comment

By Chris Pursell and Michele Greppi

Sources at News Corp. and Liberty Media confirmed Thursday that a deal between the two companies to exchange Liberty’s 19 percent share of News Corp. for control of media outlets including DirecTV has been finalized. The sources said an official announcement of terms could be made as early as next week.

The tax-friendly deal, news of which was broken by The New York Times, would provide Liberty with DirecTV, three regional sports networks and $550 million in cash in return for Liberty’s entire stake in the Rupert Murdoch-led News Corp. The Times cited as its source an anonymous banker who had been briefed on terms of the deal.

Liberty Media CEO Greg Maffei said Wednesday that recent talks with News Corp. to obtain the company’s 39 percent stake in DirecTV would provide Liberty with “distribution muscle” for its own media outlets, which include the QVC television shopping network, the Starz Entertainment group networks and Discovery.

However, Mr. Maffei, speaking at the UBS media and communications conference in New York, would not comment on the status of the News Corp. deal. “Today we have a host of content assets that don’t have the distribution muscle we used to have,” Mr. Maffei said Wednesday. He later added, “Since the sale of TCI we have tried to protect those assets as much as possible, but we really haven’t had the ability to have an ongoing distribution arm to help do that. DirecTV could help in that process.”

Rumors of the proposed swap began surfacing in September. Although those rumors were denied by News Corp. executives, they launched speculation that Mr. Murdoch no longer considers the satellite television platform a key to the company’s long-term plans.