After two years of discontent, Rupert Murdoch may soon succeed in parting ways with John Malone. Murdoch's News Corp. and Malone's Liberty Media have cut an $11 billion asset swap to give Liberty control of News Corp.'s 39% stake in DirecTV, according to several published reports.
Under the deal, News Corp. would retire Liberty's 19% voting stake in News Corp. and and cable founding father Malone get News Corp.'s stake in the pay TV provider, in addition to $550 million in cash and three News Corp.-owned regional sports networks, according to the New York Times, which cited details from an unidentified banker briefed on the terms of the deal.
Executives from both companies have been hinting for months that a swap was perhaps in the works. Liberty last year abruptly increased its voting stake in News Corp. from 9% to 17%, startling Murdoch and prompting him to establish defenses against an unwelcome takeover.
News Corp. has tried unsuccessfully for years to lure Liberty out of the company., but has never offered anything Malone deemed worthy of exchanging for his stake, 188 million voting shares and 324 million non-voting shares. In the past, for example, News Corp. offered Liberty several local stations .
With the satellite business limited in its growth, DirecTV has frustrated News Corp. lately which could explain the company's willingness to part with it. Murdoch aggressively went after DirecTV for years, but has been so disappointed with it lately, he has called it a "turd bird."
According to the New York Times, a contract could be signed within two weeks. Liberty had insisted on a deal that minimizes taxes for both. The sports networks, owned by News Corp. subsidiary Fox, were included to make the deal a tax-free spinoff for both companies.