• The Hollywood Reporter, Wednesday, September 20, 2006 12 PM

Rupert Murdoch's willingness to surrender a hard-won controlling interest in DirecTV to fend off a threat from John Malone's Liberty Media is indicative of a new industry mind-set. And it will result in the restructuring and even dismantling of media companies, writes Diane Mermigas. The trading of assets and the restructuring of major media conglomerates will be brisk during the 18 months, she says, as players reposition themselves in a digital marketplace governed by new rules. Murdoch has cooled on DirecTV's distribution magic, likely because of impatience with how long--and how much--it will take to make it more competitive with cable and telephone companies. "We believe News Corp. has grown increasingly concerned with the long-term growth prospects of the satellite business in the U.S.," says Pali Capital analyst Richard Greenfield.

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