Murdoch looks to release bird
Rupe considering DirecTV sale to Liberty
By JILL GOLDSMITH
Murdoch
Martin
In a splattering blow to the satellite biz, Rupert Murdoch supposedly dubbed DirecTV a "turd bird" and is considering selling News Corp.'s controlling stake to Liberty Media.
FCC chairman Kevin Martin on Thursday shot down another possible outcome for the satcaster. He indicated regulators still would be reluctant to greenlight a merger between DirecTV and smaller rival EchoStar.
News Corp. owns 38% of DirecTV, the nation's largest satellite provider. But Murdoch's been down on the business lately. Cablers are successfully rolling out a triple play of video, Internet and telephone -- service that satcasters can't easily match.
DirecTV stock fell 3.23% Thursday to close at $19.19 after a Morgan Stanley analyst downgraded the shares.
A person close to the conglom said a DirecTV sale is being discussed as one of several possible ways to unwind Liberty's large stake in News Corp.
CNBC reported that Murdoch had made the "turd bird" remark.
For well over a year, News Corp. has been trying to find a way to buy Malone's stake in exchange for some combination of assets and cash. Liberty holds voting and non-voting stock worth $10 billion, making Malone News Corp.'s second largest shareholder after Murdoch.
Malone's position made Murdoch so nervous that News Corp.'s board adopted a poison pill, which is meant to deter hostile takeovers. Shareholders, including Liberty, will vote at News Corp.'s annual meeting Oct. 20 on whether to keep the poison-pill measure in place.
News Corp. wanted to resolve the issue before then.
Investors tend not to like poison-pill provisions, and some shareholders had sued News Corp. for imposing it and then extending it.
This past summer, the swap for News Corp. stock was going to include some Fox TV stations, but that option seems to have been tabled.
News Corp. chief operating officer Peter Chernin said earlier this week that "talks (with Liberty) are going pretty positively."
"We'd like to see this resolved, but we're not going to feel pressure to do a deal. We feel that investors are likely to vote in favor of a poison pill because no one wants us to do a deal that's not in our best interest," he said at a media conference.
Chernin also shot down speculation that DirecTV is looking to merge with EchoStar, saying there have been no substantive talks.
The satcasters tried to merge in 2002, but U.S. antitrust regulators killed the deal, and News Corp. swooped in.
Some industryites have argued recently that the entrance of telcos into the video biz has changed the competitive landscape and thus could render a satellite merger allowable. "Obviously, there's the potential for that in the future," Martin said, referring to the growth of the telco TV biz. "But I don't think it's been widespread enough to talk about changing our analysis of the nationwide video market," he said on a conference call with Wall Streeters sponsored by UBS.
Variety.com - Murdoch looks to release bird