Shareholders approved the formation of a new company out of DirecTV Group Inc. and some of Liberty Media Corp.'s entertainment businesses, as the chairman of both firms dampened speculation about a sale to a big phone company.
Media mogul John Malone told The Associated Press that he could see the new DirecTV, the nation's largest satellite TV provider, collaborating more closely with phone companies to offer Internet and phone services that compete with cable TV operators. But he was vague on whether or not he would seek a sale.
"We do bundling. We do product development directly with them. It's a major source of new subscribers for DirecTV," he said. "Whether it would lead to consolidation, that's speculation."
Malone also said he hadn't expected to name a new DirecTV CEO who had no experience in the satellite TV business, but he ultimately chose a soft drink executive for his "great leadership capabilities."
On Wednesday, DirecTV chose Michael White, vice chairman of PepsiCo Inc. and CEO of PepsiCo International, to be its chief executive, replacing Chase Carey, who left to be president and chief operating officer of News Corp.
White "doesn't know a whole heck of a lot about satellite TV," Malone said. "On the other hand, he has enormous experience in consumer marketing, building businesses internationally and he's also very strong financially."
White will be taking over a company that has done well in this economy under the helm of Carey. DirecTV, for instance, is adding new customers while cable rivals have been losing theirs. DirecTV serves more than 18 million subscribers in the U.S. and six million subscribers in Latin America.
Malone said Liberty considered candidates from the subscription-TV industry and those who would be considered long shots. But White impressed him.
"This one guy we interviewed, I walked away and wrote down, 'Wow, this guy is terrific' _ and that guy was Mike White," Malone said.
The deal approved Thursday by shareholders of both Liberty and DirecTV calls for Liberty to shed its 54 percent stake in DirecTV, along with its regional sports networks in Seattle, Denver and Pittsburgh and a 65 percent stake in the Game Show Network and FUN Technologies, a provider of online sports games and information.
These holdings were being merged with the rest of DirecTV, with existing shareholders of both getting shares in a new company under the DirecTV name.
Liberty, which is based in Englewood, Colo., also is contributing $30 million in cash and transferring $2 billion of debt to the new company. DirecTV is offering $650 million in funding.
But Liberty will retain its Starz Entertainment premium movie channel and other holdings under the name Liberty Starz, which will trade separately as a new tracking stock.
Malone will own 3 percent of the new company but control 24 percent of the votes. He will take the post of chairman.
The spinoff was expected to close Thursday. Shares of DirecTV, which is based in El Segundo, Calif., gained 46 cents, or 1.5 percent, to close Thursday at $31.50. Trading in the new DirecTV would begin Friday.