• by Wayne Friedman , December 15, 2008

Looking to increase the value of its programming assets, Liberty Media Corp., owned by John Malone, said it would spin off some of DirecTV and the Starz movie and entertainment TV channels into a separately traded company, Liberty Entertainment.

Right now, Liberty Entertainment trades as a "tracking" stock, allowing investors to obtain a financial stake in the business and track its performance. Liberty Entertainment now will be converted into a separately traded business, and investors will receive shares in the new subsidy.

Under the proposal, Liberty Entertainment includes all of Starz Entertainment and 50% of The DirecTV Group, 100% of Fun Technologies and Liberty Sports Holdings, 50% of GSN LLC and 37% of WildBlue Communications Inc., a satellite-Internet provider.

Liberty's 52% stake in the satellite-television operator is valued at more than $12 billion, based on the unit's $24 billion market capitalization, reported the New York Post.

Starz Entertainment includes premium movie cable channels Encore Drama, Encore Westerns and Encore Action, which are sold mostly on cable operators' digital tiers pricing package. The good news, analysts say, is that the Starz group of networks are not ad-supported--so they are not always subject to the whims of a weak consumer economy.

Investors seemed to like the news: Liberty Entertainment tracking stock was up just under 24%, or $3.10, to $16.06 in midday trading.