Liberty Entertainment Holders Approve Reorganization

Liberty Entertainment shareholders have approved a plan to merge various operations with majority-owned DirecTV Group Inc. (DTV) and spin off from its parent, John Malone-controlled Liberty Media Corp. (LCAPA, LINTA, LMDIA).

The move will simplify structures and allow for the largest satellite-television provider in the U.S. to pursue strategic deals and partnerships difficult to execute presently. Malone, his wife and his family trusts will own super-voting shares in the new DirecTV, giving them 24% voting power.

"For the first time, DirecTV shareholders will control its future without a controlling corporate parent," then-DirecTV Chief Executive Chase Carey said in May when the move was first announced. He resigned soon thereafter to rejoin News Corp. (NWS), owner of this newswire and one-time part-owner of DirecTV. The company said Wednesday that former PepsiCo Inc. (PEP) executive Michael White will take over at the start of the year.

Besides DirecTV, included in the newly organized company will be three regional sports networks and stakes in the Game Show Network and FUN Technologies. The remaining Liberty Entertainment will be renamed Liberty Starz, with the pay-TV channel the highest-profile asset. The changes will take effect after the close of trading Thursday.

Liberty Entertainment shares were recently up 0.9% to $36.10 amid a broad market decline while DirecTV added 0.6% to $31.23. Liberty Entertainment has doubled this year while DirecTV is up 36%.

-By Nat Worden, Dow Jones Newswires; 212-416-2472; [e-mail]