New York – News Corp. and Liberty Media followed through on a much-anticipated deal that will exchange Liberty’s 16.3 percent stake in News Corp. for News Corp.’s 38.5 percent stake in satellite TV provider DirecTV, the companies announced today.
The move puts John Malone, the former chairman of cable giant Tele-Communications Inc. (TCI), in charge of the satellite operation he and fellow cable multi-system operators (MSOs) aggressively fought at the launch of the digital broadcast satellite industry.
It also gets him out of the company ruled by fellow media mogul Rupert Murdoch, who had grown increasingly concerned with Malone’s decision to acquire a significant stake in his businesses.
News Corp. said the deal will amount to a buyback of about $11 billion of its own stock.
In the deal, Liberty is also to receive News Corp.’s regional sports networks from Denver, Pittsburgh and Seattle and $550 million in cash.
The deal was approved unanimously by the boards of both companies. In the announcement, Liberty said it expects long-time News Corp. employee Chase Carey to remain as DirecTV’s president and CEO. Liberty will appoint new directors to take News Corp. board seats.
The move will also give Liberty strong leverage in gaining national distribution for new programming properties it produces, something John Malone has missed in the post TCI years.
The deal, which is subject to regulatory approvals and a vote by News Corp. Class B shareholders, is expected to close in the middle of 2007.
The Federal Communications Commission also must approve the deal.
A past attempt by corporate parent General Motors to sell DirecTV to rival EchoStar failed to clear regulatory approvals. But the sale of controlling interest in the company to News Corp. was approved.