"They are talking," a senior executive close to Mr. Malone told Advertising Age. "It's the only suite of programming available to purchase. There are a lot of one-offs but there's nothing except Rainbow."
Vertical integration needed
Once the sale of News Corp.'s 38% stake in satellite provider DirecTV Group to Liberty Media is complete, by mid-2007, DirecTV will be the "only company not vertically integrated. It's very clear when you look at Time Warner [Cable] and Comcast that there is an advantage" because of their programming, this executive said.
Spokesmen for Liberty Media and Cablevision had no comment. The news of the talks were first reported by the New York Post today.
The Post said Mr. Malone is out scouring for programming for DirecTV, given Liberty Media's lack of its own content. Mr. Malone built Liberty on the back of a strategy that saw his company take stakes in programming carried by its cable system, TeleCommunications Inc. TCI was sold to phone giant AT&T in the late '90s. This latest news could begin to put Mr. Malone back in the content business in a major way.
The company, directly or indirectly, owns QVC, a $7 billion business, and Starz Entertainment Group, which has 15-plus movie and entertainment-related channels. The company also shares a 50% stake in game show channel GSN with Sony. Liberty's interest in Discovery Holdings was recently spun-off. The company will also receive from News Corp. a number of Fox regional sports channels as part of the deal.
Rainbow Media, whose networks include AMC, WE: Women's Entertainment, Fuse and IFC, also operates video-on-demand services Mag Rack and Sportskool and is a sibling to Cablevision's sports networks such as the Madison Square Garden Network. Last month, Rainbow signed a major carriage distribution deal with Verizon's new fiber optic TV service, Fios TV, for its networks.
Late last year, Cablevision's owners, the Dolan family, signaled their interest in taking the cable operator off the public markets and returning it to private hands.