In real life game of Monopoly, moguls Rupert Murdoch and John Malone have decided to swap ownership of two pieces of prime media real estate.
According to news reports, but not yet formally announced, the deal would allow Malone’s Liberty Media to gain operational control over DIRECTV, the satellite TV broadcaster. In exchange, Malone will give up a 19 percent voting stake in Murdoch’s News Corp.
The win-win agreement, said to be at the handshake stage, would settle a two-year-old corporate power struggle between two of the most powerful figures in the media industry. Under the deal, Murdoch, who controls News Corp., will swap News Corp.’s 39 percent interest in DIRECTV to Malone in exchange for Liberty’s voting stake in News Corp.
In addition to News Corp.’s controlling stake in DIRECTV, Malone’s company will also get three regional cable sports channels and $550 million in cash. The deal was constructed to save both parties large tax bills because it is structured as a swap instead of a sale of assets. Sources close to the deal, confirming reports in last week’s “New York Times” and “Wall Street Journal,” told the Associated Press that an announcement could come in a matter of days.
In the meantime, Liberty’s CEO Greg Maffei, who did not discuss the status of the talks, said at an investor conference last week that gaining DIRECTV would be “attractive” to Liberty by bolstering its ability to distribute programming such as TV shows and movies.
Murdoch would also win by gaining greater control over News Corp., the global media conglomerate that owns the Fox broadcast network, a large group of TV stations, the Twentieth Century Fox movie studio and the social networking site MySpace. Murdoch’s family currently has about 30 percent of the company’s voting interest.
Get the TV Tech Newsletter
The professional video industry's #1 source for news, trends and product and tech information. Sign up below.