• by David Goetzl  @dgoetzl, December 11, 2007

Could Liberty Media take DirecTV off the NASDAQ as a separate stock? Its CEO didn't rule it out once Liberty takes over controlling interest of the satellite operator from News Corp.

"We'll see what the future holds," Greg Maffei said last week at an investor event. "It may make more sense to be a larger owner, either with hard control or all the way to 100%. It may make more sense if the right offer comes along to reduce our stake."

In a transaction agreed to last year that still hasn't closed, Liberty is swapping stock in News Corp. for the company's 40% stake in the satellite provider.

With a current market cap of some $29 billion, the value of Liberty's stake would be in the $12 billion range--meaning that gaining 100% control would come with a high cost.

If Liberty decides to go in the opposite direction and lower its stake, it would wait until enough time has elapsed for it to maintain the tax-free status of the News Corp. transaction.

Still, Maffei said Liberty is not committed to the 40% position. "We think the asset is well-positioned, and having a larger stake is positive. But we'll weigh that against the financial risks and opportunities at the time," he said.

Part of the News Corp. deal also includes Liberty taking control of three regional sports networks--in the Denver, Pittsburgh and Seattle DMAs--which has fueled speculation that Liberty may look to bulk up its assets in the sports programming arena. But while Maffei said he likes the cash flow the networks provide, he threw cold water on future acquisitions--largely because of a snowballing effect that could result in consumer backlash that could hurt the business.

"They're rather scary to the degree that you're cutting deals with the content owners, the leagues or the teams. Then you're turning around and trying to collect good rents from the distributors, primarily the MSO in the market or the satellite companies," Maffei said.

"And that process has led to a huge amount of money flowing to the teams and bigger and bigger rents being extracted from cable companies and ultimately consumers. How long that process goes on ... when that saturation point is reached ...[it's] not clear what the consumer is going to say, and not clear when the cable companies and the satellite companies are going to put their foot down," he added.

Maffei cited the struggles of the NFL Network and Big Ten Network in gaining wide carriage--and a Comcast-owned regional network in Portland having similar difficulties in its area.

Liberty will be in the position of being on all three sides of the negotiations, as a content owner (the Atlanta Braves); programmer with the three networks that must pay teams for carriage rights; and a carrier in DirecTV that pays networks.

"I'm worried about investing too heavily, given those risks," he said.