News Corp. may be in talks to transfer control of the nation’s largest satellite-TV provider to Douglas County-based Liberty Media Corp.
El Segundo, Calif.-based DirecTV could possibly be exchanged for Liberty’s 19 percent voting stake in New York-based News Corp., according to a CNBC report Thursday.
If such a scenario played itself out, the nation’s two biggest satellite-television companies would be controlled out of Douglas County. EchoStar Communications, which operates the Dish Network, also has its headquarters in the suburb south of Denver.
DirecTV has more than 15 million subscribers, and EchoStar has 12.3 million.
News Corp. spokesman Robert Mercer said the company “doesn’t comment on speculation.”
Liberty Media, which controls premium movie channel Starz and shopping network QVC, declined to comment.
Liberty and News Corp. have been trying for months to broker a tax-efficient deal that would relinquish some of Liberty chairman John Malone’s control at News Corp.
Rupert Murdoch is reportedly down on his U.S. asset, according to the CNBC report.
“Rupert saying he’s not happy with DirecTV is very telling and maybe is important, long term, to the status of DirecTV,” said Jimmy Schaeffler, senior multichannel analyst for The Carmel Group.
Liberty chief executive Greg Maffei and News Corp. president Peter Chernin were both at a Merrill Lynch media conference in Pasadena, Calif., this week, and have been telling investors that talks between the two companies have been positive, according to the CNBC report.
News Corp. has a majority 38.3 percent stake in DirecTV valued at about $9 billion. Liberty’s stake in News Corp. is valued at $11.2 billion.
“This would seem to make a lot of sense. Maybe Liberty would transfer a large percent, but not all, of their stock over to DirecTV but still keep an interest in News Corp.,” Schaeffler said. “This would take some stress off of News Corp.”
As Liberty’s voting power in News Corp. grew from 14 percent to 19 percent in late 2004, fear of a Malone takeover prompted Murdoch to adopt a defensive poison-pill strategy. The poison pill allows the Murdoch family or shareholders other than Malone to acquire News Corp. shares at a discount if someone other than the Murdochs acquire more than 15 percent of News Corp. stock.
The speculation about offering up DirecTV to Liberty comes weeks before News Corp. shareholders are expected to vote on an extension of the poison pill at an October annual meeting.
Malone has praised News Corp. and its stock in the past, calling it a “well-run” company.
DirecTV is an important asset in the News Corp. empire, said Bob Scherman, editor of Satellite Business News, a trade publication. News Corp. also owns Internet social-networking site MySpace and 20th Century Fox.
“The only way News Corp. would give up DirecTV is to resolve the Liberty situation,” he said. “The only thing more important is maintaining control (of News Corp.) for (the Murdoch) family.”
EchoStar and DirecTV were rumored to be considering a merger earlier this summer.
On Thursday, Federal Communications Commission Chairman Kevin Martin said any merger attempt by DirecTV and EchoStar is likely to meet regulatory resistance. He said there is too little competition in the pay-TV industry to green-light a possible merger.
Martin said video offerings from telecommunications companies such as Verizon have yet to offer enough competition to make consolidation in the satellite industry doable from an antitrust perspective.
Liberty also is in talks with Time Warner Inc. about receiving assets, such as the Atlanta Braves, in exchange for its 4 percent, or $2.7 billion, stake in that company.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
