Liberty, News Corp. won't seek DirecTV jointly
NEW YORK — John Malone’s Liberty Media and Rupert Murdoch’s News Corp. have discarded plans to bid jointly for DirecTV, people close to the companies said Wednesday.
The move could jack up competition for News Corp. as it seeks to buy the satcaster. It also has cash-rich Liberty juggling two sets of talks as it pursues a separate acquisition of Vivendi Universal Entertainment.
Liberty is hankering for Viv U’s showbiz assets, working closely on a deal with Barry Diller, chairman of Vivendi Universal Entertainment and USA Interactive. Liberty owns stakes in both companies. “It’s fair to assume that Barry’s in the middle,” a person close to the situation said.
Liberty CEO Robert Bennett has trumpeted his company’s interest in Universal as a prime content vehicle for Discovery and Starz-Encore. Vivendi is mulling an offer from a consortium led by Marvin Davis and has overtures from MGM, NBC and others. Vivendi’s board meets next week to consider a process for disposing of the assets — and address whether to sell them as a package or piecemeal. The latter option would require a settlement with Diller, Vivendi’s partner in VUE.
Diller’s controversial role
Some industry insiders speculate that Diller’s controversial role at the company may make Viv U more wary of any deal that involves him.
On the satellite front, Liberty owns 18% of News Corp., a fact it will have to consider if it pursues DirecTV, a target that’s seen as a strategic gem for Murdoch.
News Corp. and Liberty both wanted control in a deal and had agreed to a 50-50 partnership that Wall Street said didn’t seem particularly advantageous for either company. General Motors’ recent decision to sell only about 20% of DirecTV parent Hughes, vs. the 30% previously envisioned, lowered the price and made a solo bid by either mogul more feasible.
Had minority stake
Liberty was a minority partner in News Corp.’s first, unsuccessful bid for DirecTV. But a communal plan for round No. 2 was always on shaky ground. Murdoch may have been irked several months ago when Malone approached EchoStar chairman Charlie Ergen about a potential deal.
(News Corp. lost DirecTV to smaller satcaster EchoStar two years ago, but that merger collapsed when it failed to pass federal antitrust regulators.)
Bennett has said his company would chase DirecTV with or without News Corp. News Corp. chief operating officer Peter Chernin said several weeks ago during a conference call that News didn’t have a partner.