Acquiring DirecTV in an asset- for-stock swap with News Corp. could provide cable magnate John Malone an opportunity to enhance the nation’s largest satellite TV service using his Liberty Media Corp. holdings.
News Corp. is reportedly considering a swap of its majority stake in DirecTV for Liberty’s 19 percent stake in News Corp.
Liberty is controlled by Malone, who ran cable provider Tele-Communications Inc. for 25 years. Malone has “always looked at satellite as an interesting prospect,” said Michael Hopkins, senior editor for Lakewood-based trade publication SkyReport.
Since selling off TCI in 1999, Malone has built Douglas County-based Liberty into a programming provider with popular networks such as QVC, Starz, the Hallmark Channel and the Game Show Network.
While better programming deals between Liberty’s content companies and DirecTV would be a sure thing, Liberty’s technology holdings, in companies such as Wildblue Communications, Sling Media and Current Communications, may be more compelling.
“It’s always interesting to see what Malone is going to do next,” Hopkins said. “A lot of people are frowning on satellite. Maybe there’s something Liberty sees in satellite TV that other people don’t see. Maybe there’s something they can do to make satellite TV better.”
For example, Liberty has a 32 percent stake in Greenwood Village-based Wildblue, which offers satellite-based, high-speed Internet service primarily in rural areas.
In June, Liberty and Wildblue said they would bundle TV and Internet services for customers by year’s end. Wildblue has a similar deal with Douglas County-based EchoStar Communications Corp., the nation’s No. 2 satellite TV operator with 12.3 million subscribers.
Being able to bundle Internet and TV service would allow satellite providers to better compete against cable companies and phone companies such as Verizon, which are able to sell customers a “triple play” bundle of TV, Internet and telephone.
Liberty owns 16 percent of Current Communications Group, which is developing a way to distribute broadband access over power lines. However, the technology is expensive and years from fruition.
“Liberty is always looking at cutting-edge stuff,” Hopkins said.
Liberty also has a 6 percent stake in Sling Media, makers of a product called the Slingbox, which lets users control and view their home TVs and DVRs over the Internet and cellphones.
Liberty chief executive Greg Maffei said at the Merrill Lynch Media and Entertainment Conference in New York last week that the companies are continuing negotiations but nothing had been decided, according to The Associated Press.
DirecTV officials would not comment on any possible deal.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
