Murdock may "transfer" DirecTV Liberty Media

[Earl Bonovich]

http://news.yahoo.com/s/nm/20060914/bs_nm/media_newscorp_liberty_dc_1


NEW YORK (Reuters) - News Corp. (NYSE:NWS - news) has held talks to swap its controlling stake in DirecTV Group Inc. (NYSE:DTV - news) for Liberty Media's (Nasdaq:LCAPA - news)(Nasdaq:LINTA - news) stake in News Corp., according to a CNBC report on Thursday.

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Rupert Murdoch has been in discussions to buy back a 20 percent voting stake in News Corp. from Liberty Media Chairman John Malone since 2004 and CNBC quoted unidentified sources as saying their talks have recently centered around DirecTV.

Malone quietly boosted his stake in the company that owns MySpace and the 20th Century Fox film studios as News Corp. moved its domicile to the United States.

Malone purchased the stake as big Australian shareholders were required to sell off the stake in a non-Australian company.

The on-again and off-again discussions to sell the stake have heated up in recent weeks ahead of News Corp.'s October 20 annual shareholders meeting, where management will be required to seek shareholders approval to extend a poison pill that protects it from a hostile takeover, CNBC reported.

It said the current scenario called for News Corp. to swap its 38 percent controlling stake, worth about $9 billion, in DirecTV, the top U.S. satellite television operator, for Liberty's stake in News Corp.

News Corp. and Liberty had no comment. Malone and analysts have said the discussions have centered around defraying potential tax liabilities.

News Corp. would also be required to contribute an operating business in order for the transaction to be tax free according to a Merrill Lynch report.

According to CNBC, Murdoch, who once touted its global network of satellite TV assets, has soured on the business as it has been unable to offer high-speed Internet service without partnerships with telephone companies.

[Mike D-CO5]

So what does this mean to the ownership of Directv by Rupert? Does this mean that Liberty Media chairman John Malone will own it instead? Will Rupert finally let go of Directv after he wanted it for so long? Someone please comment on this and give me some perspective.

[Earl Bonovich]

These are the only news reports on it....

And from those reports, how you described it... is exactly how it "appears" it would happen.

[Alan Gordon]

Probable Outcome If Liberty Media Were To Take Control Of DirecTV:

1. Starz HD would probably be added as soon as they had the bandwith for it.
2. The additional Starz channels not carried by DirecTV would be added.


Possible Outcome If Liberty Media Were To Take Control Of DirecTV:
1. Some sort of Starz VOD type service would probably be available from DirecTV.
2. Encore HD might return!
3. GSN would always have a place on DirecTV.

I also noticed that Liberty Media owns OpenTV. I remember that Interactive features on DirecTV used to be done by Wink!, and while I know it's not Wink!, I don't remember who does the current Interactive features for DirecTV. I don't think it's OpenTV, is it?

~Alan

[concord704]

Not sure if this a reliable "news" website, but found comments interesting:

http://www.variety.com/VR1117950090.html

[Jeremy W]

I don't remember who does the current Interactive features for DirecTV. I don't think it's OpenTV, is it?
NDS.

[Alan Gordon]

NDS.

I was thinking that was right... I should have known! ;)

~Alan

[uncrules]

Not sure if this a reliable "news" website, but found comments interesting:

http://www.variety.com/VR1117950090.html
Variety is a very legitimate news site. It is the main entertainment industry source of news. It isn't some sort of tabloid newspaper.

[Ohioankev]

If you check out the Liberty Media website, it is spun off from AT&T.

The company itself was aquired AT&T from TCI in 1999 for $54billion dollars,and spun off from AT&T in 2001 to become an independant company. Whats interesting about that statement is that AT&T leases DISH Network receivers and has in the past tried to purchase DISH Network.

Lets say in the future due to all of the legal pressure DISH Network is seeing they sell to AT&T and (this is the far fetched part) Direct TV is purchased by Liberty Media which is spun off from AT&T. Is there a way that AT&T can pull that company back under it's AT&T umbrella, via a sale and merge the two sattelite companies into one.

Thats just what i thought of once i seen that AT&T was affilated with Liberty Media at one time.

[Nick]

"Murdoch seems to vary from week to week on his commitment
to being in the satellite television biz as 'industry transforming
transactions' loom on the horizon"

From SkyRetailer

DirecTV Swap Between News Corp., Liberty Media?

News reports yesterday suggested that News Corp. and Liberty Media are discussing an agreement that would include swapping News Corp.'s 40 percent stake in DirecTV - worth about $9 billion - for Liberty's 18 percent hold on News Corp. (valued currently at $11 billion).

According to Wachovia's Jeff Wlodarczak citing a CNBC report, News Corp. owner Rupert Murdoch is souring on DirecTV and his company is attempting to resolve the 18 percent ownership stake issue by the Oct. 20 shareholder meeting. Press reports have noted that Liberty is also talking to News Corp. regarding its TV stations, the report said.

Wlodarczak said Murdoch seems to vary from week to week on his commitment to being in the satellite television biz as "industry transforming transactions" loom on the horizon for the U.S. DBS market.

Speaking on the recent talks of a merger between DirecTV and EchoStar Wlodoarczak said, "If management reached the conclusion that they could not clear regulatory hurdles or EchoStar CEO (Charlie) Ergen is unwilling to sell, it may - along with the prospect of buying back the 18 percent in News from Liberty - have opened up the possibility of a News Corp. exit from DirecTV.

"If News Corp. decides to swap its stake in DirecTV with Liberty Media it would likely reduce EchoStar's short-term negotiating leverage for a potential sale of the company to AT&T," the analyst said.

www.SkyRetailer.com - used with permission
.

[Bobman]

Might also mean the return of TiVo to DirecTV if he sells.

[Jeremy W]

Might also mean the return of TiVo to DirecTV if he sells.
Let's hope not! :eek2:

[bidger]

I really wish I could get behind the HR20, Jeremy, but I'm not liking what I'm seeing on boards like this. The main thing I ask for a DVR to do is record reliably and store those recordings until I wish to delete them, provided the space is there. The HR20 might be an improvement over the R-15, but if neither are as reliable as my D-TiVos, I see no reason to jump.

I had high hopes when Murdoch came on board because I wanted D* to be affiliated with a content provider to allow it to have the same kind of leverage most cable companies have. Also, I didn't want the merger with E*. Now, I think a lot less of it and Murdoch himself, not that he was role model to me before. How was he not aware of the limitations of satellite before he dove in?

[cdavis]

I hope it happens tomorrow and maybe we can get a new deal with tivo.

[wipeout]

I would love the return of Tivo.

[Jeremy W]

I really wish I could get behind the HR20, Jeremy, but I'm not liking what I'm seeing on boards like this. The main thing I ask for a DVR to do is record reliably and store those recordings until I wish to delete them, provided the space is there.
The HR20 has potential, and full reliability should just be a few days away. It was undoubtedly pushed out the door too soon, but I have faith that it's shortcomings will be corrected. In any event, mine hasn't missed any scheduled recordings yet.

[UTFAN]

http://news.yahoo.com/s/nm/20060914/bs_nm/media_newscorp_liberty_dc_1

Anyone read the article in Variety Business?... according to the paper, Rupert called DirecTV a "Turd Bird."

[Clint Lamor]

Even if by some miracle they cut a new deal with Tivo you probably wouldn't see any new products for at least a couple of years. That on top of the fact I see no financial benefits to DTV under current or future ownership. They have already invested a tidy sum of money in developing their R15 and HR20 platforms. In the perfect world I would like to see both of them developed and maybe allow something like the Moxi system into the came so we have a large choice in the DVR technology we choose to use.

[cookpr]

Honeslty, being a 3 year investor in D*, this can be nothing but positive in my mind. I have sold off my interest in D* months ago, but seperating themselves from the umbrella of NewsCorp can only be a positive (lone negative being the available cash flow from News Corp).

I too had great hopes when Murdoch rode into town, but I think most of us can agree (that while the future looks brighter with the new sats going up in 2007), NewsCorp has had a fairly negative impact on D*:

1 - Picture quality continues to degrade - I remeber in the 90's when SD picture was simply phenomenal.

2 - They got caught with their pants down on HD (albeit, temporarily) when Dish took Rainbow over (Voom)...

3 - Their decision to jam all the SD locals onto the same sat is really the cause of the space problems...they simly dont have any, because they are covering 100+ markets each with there own feed of the locals.

4 - Tivo decision was awful....think regrets will begin when the cable cos roll out their TIVO boxes....delay in MPEG4 DVR was poor

And the list can go on....I will say, 2007 looks up, whether D* is part of NewsCorp or Liberty. I am assuming, this pretty far along in negotiations and seem like the best way to remedy the situation they are currently facing.

[Bobman]

The HR20 has potential, and full reliability should just be a few days away.


Sure it is and I have a bridge to sell you. :D They have been saying the same thing about the R-15 and its been close to a year now. The HR20 has many of the same issues the R-15 has.

[Herdfan]

Even if by some miracle they cut a new deal with Tivo you probably wouldn't see any new products for at least a couple of years. ......... They have already invested a tidy sum of money in developing their R15 and HR20 platforms.
I would bet TiVo could have a new MPEG-4 DVR with MRV in 6 months if they were given the green light. As Earl discovered with his R10, the code for MRV is there, it just needs activated.

Keep in mind that D* didn't spend the money developing either the R15 or HR20. The R15 is based on the NDS XTV box and the HR20 is based on the Ucentric code that was started with V*. I am sure D* has some money invested, but both are based on other companies projects.

[TheRatPatrol]

Tivo wanted more money per D* subscriber. So if this were to happen, maybe D* could give people the choice if they want to go with Tivo they could pay a little bit more, or go with the D* in house DVR instead.

If this were to happen, could the HR20 support a Tivo software update? Is it not all about just having a hard drive, do you need new hardware too or?

Sorry to get off topic here.......I know Earl, I know, all wishful thinking, it'll never happen, but you never know. :D

[Earl Bonovich]

If this were to happen, could the HR20 support a Tivo software update? Is it not all about just having a hard drive, do you need new hardware too or?

Sorry to get off topic here.......I know Earl, I know, all wishful thinking, it'll never happen, but you never know. :D

You can never really ever say never, except for saying never say never... :D

A good amount of work would have to be done to get the TiVo GUI and guts

[TheRatPatrol]

You can never really ever say never, except for saying never say never... :D

A good amount of work would have to be done to get the TiVo GUI and guts
OH I don't know anymore, I just wanted something that will receive and record HD channels, including the new MPEG4 ones. :D

[bidger]

The HR20 has potential, and full reliability should just be a few days away.
OK, Jeremy, if that happens, fine. But, I would be left asking why that wasn't the case from the moment it was released to the general public after the beta run?

[Jeremy W]

But, I would be left asking why that wasn't the case from the moment it was released to the general public after the beta run?
Because for one reason or another, DirecTV decided to rush it out the door. Was it a bad decision? I'd say yes. Does it indicate the quality of the product a week from now? No way.

[Jasen]

If Directv goes to liberty media do you think the reciver rental program is going to continue?

[Wolffpack]

The HR20 has potential, and full reliability should just be a few days away. It was undoubtedly pushed out the door too soon, but I have faith that it's shortcomings will be corrected. In any event, mine hasn't missed any scheduled recordings yet.
A few days away? :confused:

[Jeremy W]

A few days away? :confused:
Yep. And they're already well on the way with 0xcc.

[morgantown]

If Directv goes to liberty media do you think the reciver rental program is going to continue?

It makes DTV more profitable...whomever owns them. So in a word, yes.

[cheer]

If you check out the Liberty Media website, it is spun off from AT&T.

The company itself was aquired AT&T from TCI in 1999 for $54billion dollars,and spun off from AT&T in 2001 to become an independant company. Whats interesting about that statement is that AT&T leases DISH Network receivers and has in the past tried to purchase DISH Network.

Lets say in the future due to all of the legal pressure DISH Network is seeing they sell to AT&T and (this is the far fetched part) Direct TV is purchased by Liberty Media which is spun off from AT&T. Is there a way that AT&T can pull that company back under it's AT&T umbrella, via a sale and merge the two sattelite companies into one.
No.

First, yes it was part of AT&T Broadband, which AT&T created by buying various cablecos (including TCI), but AT&T Broadband was never truly "integrated" -- it was always treated as a separate business unit, and it didn't stick around for long. A few short years later AT&T dumped all of Broadband over to Comcast, except for the portion spun off as Liberty Media.

Second, AT&T has also, in the past, resold DirecTV service, and some of those installations are still in place; means nothing.

Third, what you think of as AT&T today is a different company than the AT&T that spun off Liberty Media. That old AT&T no longer exists; the new AT&T is really SBC with what remained of AT&T's assets, etc.

Fourth, there's no way to "pull them back" other than to acquire them like any other company would, and believe me, AT&T won't. Aside from having learned their lesson with AT&T Broadband, the whole reason that legacy AT&T went after cablecos was because they wanted last mile copper over which they could sell services.

They don't need that anymore -- they ARE the last mile in a bunch of states now and, soon, will be in even more.

[cheer]

Probable Outcome If Liberty Media Were To Take Control Of DirecTV:
It would get worse. I'll take money on this. Complain all you like about Rupert, but John Malone could be one of the worst CEOs ever. TCI was a complete disaster before he hoodwinked AT&T into wasting a bunch of cash on it.

[cheer]

1 - Picture quality continues to degrade - I remeber in the 90's when SD picture was simply phenomenal.Same with Dish. And don't expect this to get better, regardless of who takes over -- # of channels sells subscriptions more than image quality does.
2 - They got caught with their pants down on HD (albeit, temporarily) when Dish took Rainbow over (Voom)...In what sense? Other than being able to boast a specific number of HD channels...there are no "blockbuster" channels exclusive to the Voom stuff. And this may be a matter of opinion, but there's not one channel in the Voom lineup on Dish that I'd pay even $1 extra for.3 - Their decision to jam all the SD locals onto the same sat is really the cause of the space problems...they simly dont have any, because they are covering 100+ markets each with there own feed of the locals.How do you propose they fix that? Capacity is capacity, and people want local channels.
4 - Tivo decision was awful....think regrets will begin when the cable cos roll out their TIVO boxesMaybe. I think the average viewer (meaning NOT the type that posts on enthusiast forums) doesn't care; to them, a DVR is a DVR.delay in MPEG4 DVR was poorYes, although better than shipping a buggy box, I suppose. But it's water under the bridge now, since the HR20 is available.
And the list can go on....I will say, 2007 looks up, whether D* is part of NewsCorp or Liberty. I am assuming, this pretty far along in negotiations and seem like the best way to remedy the situation they are currently facing.
Trust me, D* could be way more screwed up than it is, and John Malone's just the guy to do it.