# DIRECTV and Liberty Media Announce Combination



## Stuart Sweet (Jun 19, 2006)

> DIRECTV Group and Liberty Media Corporation Announce Combination
> 
> EL SEGUNDO, Calif. & ENGLEWOOD, Colo., May 04, 2009 (BUSINESS WIRE) -- The DIRECTV Group, Inc. and Liberty Media Corporation today announced they have entered into definitive agreements for the combination of DIRECTV Group with Liberty Entertainment, Inc., a company to be split-off from Liberty Media.
> 
> "We are pleased to announce this transaction as it will rightly put the control of DIRECTV in the hands of DIRECTV shareholders," said Chase Carey, President and CEO of DIRECTV. "Our existing equity structure was less than ideal. The transaction will improve our ability to pursue strategic initiatives that can enhance value for all DIRECTV shareholders. Additionally, in Game Show Network, FUN Technologies and the three regional sports networks, we are acquiring valuable assets that fit in well with the future of the DIRECTV business. We look forward to having the benefit of John Malone's involvement, as a significant shareholder and as chairman of DIRECTV's board post-merger."


Full text of press release: http://dtv.client.shareholder.com/releasedetail.cfm?ReleaseID=381363


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## ATARI (May 10, 2007)

Here's a MarketWatch story with a little more detail:

click


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## TheRatPatrol (Oct 1, 2003)

So what exactly does this mean for the customer, if anything? More HD channels?


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## harsh (Jun 15, 2003)

They filed intentions for this plan back on October 6th.

I'm not sure how this improves shareholder control. Either way, Liberty runs the show.



SEC filing said:


> Liberty Media has recently announced that its Board of Directors has authorized its management to proceed with development of a plan to distribute to the holders of Liberty Entertainment tracking stock, shares of a subsidiary that will hold the business and assets currently attributed to the Liberty Entertainment group, including its interest in our Parent. If the transaction is completed as currently contemplated, the assets of the new company would be comprised of approximately 50% of our Parent, 100% of Starz Entertainment, FUN Technologies, and Liberty Sports Holdings, LLC, 50% of GSN, LLC and 37% of Wildblue Communications, Inc.


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## Stuart Sweet (Jun 19, 2006)

I'm not quite sure either, but business is a funny thing. I doubt this will have any effect on the subscriber, but it is a pretty big change to the way things are run internally.


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## harsh (Jun 15, 2003)

theratpatrol said:


> So what exactly does this mean for the customer, if anything? More HD channels?


Customers can expect more of the same that they have been getting since Rupert handed over the reins to John.

Liberty Entertainment is a tracking stock so it doesn't really change anything.


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## Smthkd (Sep 1, 2004)

Based on the decline from Directv's stock and the steady fall, DTV shareholders are not convinced of this little spin off! Seems like a bad move!


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## harsh (Jun 15, 2003)

Stuart Sweet said:


> I doubt this will have any effect on the subscriber, but it is a pretty big change to the way things are run internally.


It shouldn't really have any effect on operations. It is a restructuring of the composition of Liberty Entertainment.


Investopedia said:


> What Does Tracking Stock Mean?
> 1. Common stock issued by a parent company that tracks the performance of a particular division without having claim on the assets of the division or the parent company. Also known as "designer stock".


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## mreposter (Jul 29, 2006)

Is Malone keeping his stakes in the Discovery/QVC/TLC, etc channels in the other company, rather than merging those with Directv?


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## MIKE0616 (Dec 13, 2006)

"Darth Vader" as Chairman of D*? WOW! What more can we ask for? Now I suppose that D* subs can look forward to the same level of excellence that subs did at TCI? And I thought Charlie at E* could not be outdone.


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## WestDC (Feb 9, 2008)

With 30 million in cash and 2 Billion in Debt--It's not long for this world--Bankrupcy anyone???


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## Ken S (Feb 13, 2007)

I think it means GSN HD is our next national HD channel


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## MIKE0616 (Dec 13, 2006)

Ken S said:


> I think it means GSN HD is our next national HD channel


Since Liberty also owns QVC, you can bet the farm that one of these two highly desirable networks will be next on the national HD roll-out list. :lol:


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## RACJ2 (Aug 2, 2008)

David Faber on CNBC is saying DirecTV is taking control of its destiny and now speculation will start that AT&T will purchase DirecTV.


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## sundude90 (Jun 12, 2008)

I listened to the conference call about this. On the conference call they mentioned that they have also reached new contracts with QVC & Starz which are mostly controlled by Liberty. _Chase said that there is new thing with this contract that will benefit Directv_ They also said that since GSN & a few RSN's are part of this merger that new deals will be worked out in the coming months.

They also said that this will take about 6 months to fully go into effect because of several approvals that must happen first including the FCC.


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## bobnielsen (Jun 29, 2006)

Plus ça change, plus c'est la même chose


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## bonscott87 (Jan 21, 2003)

Not a whole lot will change from our perspective. But what it does do is make DirecTV a lot more easier to sell to someone like AT&T.


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## Kheldar (Sep 5, 2004)

bobnielsen said:


> Plus ça change, plus c'est la même chose


For the non-Frenchy-French types, this roughly translates to "the more things change, the more they stay the same"


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## RACJ2 (Aug 2, 2008)

bonscott87 said:


> But what it does do is make DirecTV a lot more easier to sell to someone like AT&T.


Greg Maffei, the CEO of Liberty did state on CNBC that it would make it easier for someone like AT&T to buy. This is due to the fact it's going to be a more traditional arrangement where shareholders are holding the DirecTV shares, eliminating the corporate entity. He also mentioned that John Malone will remain an important part of DirecTV as chairman, but will be giving up control, as his stake will be reduced to 24%.


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## Phil T (Mar 25, 2002)

Cable in the sky! I drove by Liberty's HQ in South suburban Denver this weekend. The building is huge. STARZ also has a huge building right next door.


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## Jon J (Apr 22, 2002)

bobnielsen said:


> Plus ça change, plus c'est la même chose


Mais oui.


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## Reggie3 (Feb 20, 2006)

I wonder what it means for XM


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## Draconis (Mar 16, 2007)

Found another article, this one from the Wall Street Journal.

http://online.wsj.com/article/SB124143994984483073.html


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## Shades228 (Mar 18, 2008)

Reggie3 said:


> I wonder what it means for XM


XM has nothing to do with this. Liberty loaned them money they didn't purchase any stocks or anything. At this time it was nothing more then a loan. Later on when that loan is due things could change.


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## johnp37 (Sep 14, 2006)

harsh said:


> Customers can expect more of the same that they have been getting since Rupert handed over the reins to John.
> 
> Liberty Entertainment is a tracking stock so it doesn't really change anything.


 Yep, the more things change the more they stay the same. Lockups, lost and missed recordings, snail slooooooooowwwwww performance. As usual, management focus is on the bottom line and the subscriber be damned.


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## BK EH (Oct 3, 2005)

No - it eliminates the tracking stock structure.

_DirecTV will join with *Liberty Entertainment*, a unit of Liberty Media that Liberty said last fall it would spin off. Liberty Entertainment, which currently trades as a separate tracking stock, was to hold a 54 percent equity stake in DirecTV as well as Liberty Sports Holdings, which owns three regional sports networks, and a 65 percent interest in Game Show Network and FUN Technologies. 
_


_Under Monday's deal, a unit of DirecTV will merge with the spun-off company so that *DirecTV becomes Liberty Entertainment's parent. DirecTV will provide the new su*bsidiary with up to $650 million in financing to service its debt. 
_

_"This transaction clarifies DirecTV 's capital structure, reduces its shares outstanding, eliminates stock overhang and arbitrage issues, and provides DirecTV with strategic content businesses," Greg Maffei, chief executive of Liberty, said in a statement. "And *this transaction offers value to Liberty's shareholders by eliminating the discount in our tracking stock structure and allowing them to continue to participate directly in the strong performance of DirecTV*."_ _As part of the transaction, Mr. Malone, Liberty Media's chairman, will receive a special class of DirecTV stock that gives him and his family 24 percent voting power, DirecTV said._

_Liberty was already DirecTV's largest shareholder, owning a nearly 54 percent stake (although its voting power was effectively limited to 47.9 percent)._

http://dealbook.blogs.nytimes.com/2...merger-with-liberty-media-spinoff/#more-56853


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## Zellio (Mar 8, 2009)

Now that Darth Malone has destroyed the republic, the Death Star will be built!


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## dstout (Jul 19, 2005)

The Braves didn't get combined into this deal did they?


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## Johnnie5000 (Mar 26, 2008)

Meet the new boss, same as the old boss:icon_hroc


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## Bill Van (Feb 12, 2008)

I follow DirecTV closely Monday through Friday because I daytrade DirecTV and only DirecTV. I read every news story. I beliieve DirecTV subscribers will benefit in a major way down the road and here is why. DirecTV and their small new businesses will now be controlled by management, directors and shareholders. With John Malone giving up control DirecTV is free to control their own destiny. Follow DirecTV's stock through earning Thursday and into next week. If this deal is truly good for DirecTV then it stock price in a weeks time should tell you a lot.


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## MIKE0616 (Dec 13, 2006)

VANBROTHERS1 said:


> I follow DirecTV closely Monday through Friday because *I daytrade DirecTV *and only DirecTV. I read every news story. I beliieve DirecTV subscribers will benefit in a major way *down the road* and here is why. DirecTV and their small new businesses will now be controlled by management, directors and shareholders. With John Malone giving up control DirecTV is free to control their own destiny. Follow DirecTV's stock through earning Thursday and into next week. If this deal is truly good for DirecTV then it *stock price in a weeks time should tell you a lot*.


and if frogs had wings............

Since we don't have a crystal ball and the approvals from the Feds will take years, any short-term movements will be based on pure speculation. Nice try at moving the stock, though.


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## dodge boy (Mar 31, 2006)

MIKE0616 said:


> and if frogs had wings............


Their butts wouldn't hit the ground when they hop? :lol:

Seriously I hope the add the Starz and Encore HD channels, I would subscribe to them then.


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## TheRatPatrol (Oct 1, 2003)

So you think D* will be sold to Verizon or AT&T?

DirecTV to merge with Liberty


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## harsh (Jun 15, 2003)

theratpatrol said:


> So you think D* will be sold to Verizon or AT&T?


This has been a persistent rumor since the Liberty talks began years ago.


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## Shades228 (Mar 18, 2008)

John Malone still owns 48% of the voting stock. So it's not really up to anyone more then it was before. The biggest benefit is that now decisions will be made in DirecTV's best long term interest not in Liberty's even if they aligned at certain times and conflicted at others and for stock holders they don't have to worry about the relationship of DirecTV stock to Liberty's anymore.


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## Kheldar (Sep 5, 2004)

Shades228 said:


> John Malone still owns 48% of the voting stock. So it's not really up to anyone more then it was before.


The announcement of the transaction contradicts the 48% number:


> As a result of the transactions, John Malone, his wife and associated trusts will hold shares of DIRECTV Class B common stock entitling them to approximately 24% of DIRECTV's total voting power.


So Malone (along with his wife and "associated trusts") controls 24%, not 48%. While that is still the largest single shareholder of voting stock, it would be much easier to override them than it was before.


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## Shades228 (Mar 18, 2008)

Kheldar said:


> The announcement of the transaction contradicts the 48% number:
> 
> So Malone (along with his wife and "associated trusts") controls 24%, not 48%. While that is still the largest single shareholder of voting stock, it would be much easier to override them than it was before.


You are correct the article I was reading had done the math twice for the class b and class a shares and voting power.


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## mreposter (Jul 29, 2006)

The unfortunate thing is that in most of these cases management spend all their time worrying about changes in ownership and jostling for leadership positions, who's in/who's out, etc. They end up taking their eye off delivering good products and services.


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## Bill Van (Feb 12, 2008)

MIKE0616 said:


> and if frogs had wings............
> 
> Since we don't have a crystal ball and the approvals from the Feds will take years, any short-term movements will be based on pure speculation. Nice try at moving the stock, though.


Interesting comment. First I said I'm a daytrader. Not an investor. There is a huge difference. We are not concerned at all about next week. If you watched CNBC and read about the deal you would know all the major hurtles have already gone through the regulatory channels according to Liberty Entertainment CEO Greg Maffei. He said the Liberty Entertainment spinoff would happen rather quickly and the merger will come sometime before the end of the year. Not as you say years.


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