Spooked by Liberty Media's plans to double its holdings of News Corp stock, the latter's board of directors has just announced the adoption of a poison pill. (What's a poison pill you ask? Go here for an explanation.) CNN/Money explains:
Under the plan, News Corp. investors can buy one share, for every share they already own, at half price should any party come to own a 15 percent stake in the firm's voting shares. Liberty's current option to double its voting stake is exempt, but any additional increase would trigger the plan. The same applies to the Murdoch family's stake, subject to a 1 percent margin. ...
At the start of the year, Malone bought 9 percent of News Corp.'s voting shares, without telling Murdoch. Last week he did the same, acquiring the right to buy another 8 percent. Malone can still exercise that right. But if he goes any further the defense is triggered. Every News Corp. investor, apart from Malone, will be able to buy shares in the firm at half price.
As the CNN/Money article further points out, this move was made possible by News Corp.'s decision to reincorporate in Delaware. I gather that poison pills are of dubious validity in Australia, where News Corp. used to be incorporated. (Any Australian readers knowledgeable in corporate law want to help us out here? If so, email me on the poison pill's validity. Thanks!)
BTW, for liberals hoping that a Malone takeover of News Corp. would mean changes at Fox News, don't count on it:
[Malone's] political heroes are Ronald Reagan and Dwight Eisenhower, since he shares their notions about how big government and big taxes sap initiative. Yet, calling himself "a libertarian," he disagrees with Reagan-style conservatives who want the government to tell a woman that she may not have an abortion. ... The bulk of the Malone estate is earmarked for the creation of a foundation whose purpose will be to invest in education that promotes "initiative and free enterprise."
... He repeats the word "socialistic" like a mantra, saying that he picked it up from Rush Limbaugh, whom he applauds for a willingness "to say politically incorrect things." He uses the term "socialistic" to berate liberals, and even moderates, who support government social-welfare programs. He wants NBC, CBS, and ABC to be uprooted from New York, so they will be less insular. "There's a huge diversity of values in this country between what people in central Manhattan think of the values of our society and what people in Peoria think the values of our society are," he says. "I think Manhattan thinks that single parents are fine. I think it's a much more socialistic world there, where the government does everything for you." (Source)
The vast bulk of his political giving goes to Republicans. So I don't think you could expect him to turn Fox News into CNN-lite.
Anyway, I'm not sure I'd bet on Malone in this fight. Granted, Al Gore once called John Malone the "Darth Vader" of telecoms. But Murdoch is still the emperor. As one liberal media watchdog site opines:
The News Corporation is often identified with its head, ultra-conservative Rupert Murdoch, whose family controls some 30 percent of its stock. Murdoch's goal is for News Corporation to own multiple forms of programming--news, sports, films and children's shows--and beam them via satellite or TV stations to homes in the United States, Europe, Asia and South America. Viacom CEO Sumner Redstone says of Murdoch that "he basically wants to conquer the world."
And he seems to be doing it. Redstone, Disney CEO Michael Eisner, and Time Warner CEO Gerald Levin have each commented that Murdoch is the one media executive they most respect and fear, and the one whose moves they study. TCI's John Malone states that global media vertical integration is all about trying to catch Rupert. Time Warner executive Ted Turner views Murdoch in a more sinister fashion, having likened him to Adolf Hitler.
Hitler seems a bit extreme. I might go as far as Palpatine though. (Yes, I know Vader wins in the end. Drop it.)
