Sealed Section – January 23, 2004

First there was Conrad Black’s meltdown at Hollinger and now Rupert
Murdoch’s seemingly untouchable media empire appears to be under threat
by possibly the only man in the world Murdoch would consider his equal.

John Malone’s
Liberty Media now owns 9.15 per cent of News Corp’s voting stock and 17
per cent of the total, which makes Liberty Media the largest
shareholder in News Corp. (Rupert has just 15 per cent) and the second
largest voting stake.

And as Murdoch keeps using the non-voting shares as acquisition
currency, diluting existing shareholders, News Corp voting shares have
also become more valuable.

So, how did the world’s media react to the news?

The New York Times focuses on whether Malone’s actions could be
interpreted as hostile.  One indication is that Malone drastically
increased his voting stake without telling Murdoch. “It is shocking
that the transaction would take place without a phone call from Malone
to Murdoch,” said one longtime media executive.

The Times’s website listed its story on their boss and Liberty Media
below a story on the fate of Conrad Black’s newspapers. The fist quote
of the story was from Rupert himself saying, “It’s very
friendly.”  “He is very welcome. He called yesterday and told me
about it.”,,8209-973989,00.html

The Guardian variously describes Malone as a notoriously shrewd
dealmaker and Murdoch’s sometime-ally and sometime-foe.  Rather
than a power challenge, the Guardian raises the possibility that
Malone’s move could be the sign of a new and formidable alliance
between the two moguls.,7497,1128792,00.html

CNN Money also asked the question “Does Malone want News Corp?” and
canvases several theories on Malone’s motives, including one suggestion
that he may just be pursuing an new investment strategy to please
Liberty investors.

The International Herald Tribune writes that as a foreign investor in
an Australian company, Liberty could not buy a controlling stake
without government permission according to Australian law.

CRIKEY: The Malone shuffle has once again highlighted how outrageous it
is that substantial shareholders in the News Corp prefs don’t have to
reveal changes in their holdings. Why should Malone have been allowed
to creep to 4.97 per cent of the voting stock when he already held more
than 20 per cent of the prefs. The ASX really should do something about
this. Malone is free to buy and sell his News Corp pref shares on the
dips and jumps with gay abandon without telling the market.