• by David Goetzl  @dgoetzl, March 31, 2006

Liberty Media may be looking to shed its 50 percent ownership in Court TV, opening the door for either co-owner Time Warner to take control, or another bidder.

"Fifty-percent partnerships don't usually last forever," said Greg Maffei, Liberty's president and CEO.

Maffei said "Time Warner is a logical home" for Court TV, but other media companies have called to express an interest. Court TV, which offers news during the day and entertainment in prime time, could meld into TW's cable portfolio, which includes CNN and the Turner entertainment networks. Time Warner did not provide comments by press time.

Liberty and Time Warner--both half-owners of Court TV--are nearly three months into a negotiating window where each holds a card that can be used to force the other's hand. It's unclear how long the window is open. Under the agreement, Liberty can require TW to purchase its 50 percent stake--while TW, for its part, can exercise an option requiring Liberty to sell it the remaining 50 percent. Liberty has no option to purchase TW's 50 percent share. If either Liberty or TW decides to sell its stake to a third party, the other co-owner would have a first option on purchasing.

Liberty's Maffei would not comment directly on his company's plans vis-à-vis the option with TW. But he suggested that Court TV might be a better fit at a media company with multiple networks, where ad sales and distribution agreements could be bundled.

"Are we the best (place) at the end of the day for it?" Maffei said as he spoke with reporters following a presentation at a Bank of America investor conference yesterday.

However, Maffei took pains to praise Court TV as "a great asset," and to credit the leadership of its CEO Henry Schleiff. The network--valued by Bank of America to be worth from $1 billion-plus to as much as $1.9 billion--is in 85 million homes.

Liberty may be looking to shed some old-media assets and reinvest in faster-growth opportunities. The Colorado-based company owns a smorgasbord of media holdings, from QVC and Starz Encore to stakes in IAC, News Corp., and Time Warner.

A Bank of America report several weeks ago suggested that Liberty might look to swap its 4 percent stake in TW for full control of Court TV. "For Liberty, it would enable it to tax efficiently divest a passive investment for an operating business, and allow Time Warner to cleanly retire a substantial amount of stock while monetizing a passive investment," the report said.

But Maffei sounded a different note yesterday, hinting that Court TV will be out of the Liberty portfolio soon.