Media Moguls Do the Splits

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Barry Diller, chairman and CEO of IAC Interactive Corp. Astrid Stawiarz/Getty Images

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Liberty Does the Shuffle

Other moguls see acquisitions as a way to extend the reach of existing businesses. At CBS (CBS), CEO Leslie Moonves was given a set of slower-growing assets when Viacom (VIA) Chairman Sumner Redstone separated his company into two pieces at the end of 2005.

Even as the deal was closing, Moonves was completing a $325 million deal to push his network-centric company into the digital world by buying college sports cable and Internet company CSTV. CBS has since launched a record label and a music studio, bought up an online music company and one that sells video to retailers, and in May bid $1.8 billion to buy internet company CNET—paying a hefty 45% margin. At the same time, Moonves hiked the CBS dividend six times. "We're going to continue to pay that dividend," Moonves said recently while overseeing a meeting at CNET. "But we're still in business to grow this company."

Who else may join the shuffle? Start with Malone's Liberty Media, whose CEO Greg Maffei clicks off three reasons Liberty chose to create a new public entity: better value from Wall Street, potential tax benefits for shareholders, and what he calls "optionality." In mogul-speak, that means giving himself and Malone the option to buy or sell assets. Although Maffei isn't tipping his hand, he could buy a larger piece of DirecTV (DTV), which Liberty currently controls with a 48% stake. Or he could go shopping for cable channels that might hit the market if Cablevision decides to sell its International Film or AMC cable channels. Or Liberty could decide to snap up cable channels like HGTV or Food Network, now part of Scripps Network Interactive, which Scripps spun off on July 1.

Cable Acquisitions to Come?

There could be an even bigger deal coming down the pike. Time Warner's cable unit, which officially spins off later this year, could become an acquisition machine if its stock—separated from Time Warner's advertising-intensive businesses—takes off. Maybe the new company makes a bid to buy Cablevision, the New York-area cable system it has long coveted. Then again, when the cable unit splits, Time Warner CEO Jeff Bewkes will get more than $9 billion in a one-time dividend from his former unit (BusinessWeek, 8/14/08). Now that's intriguing: a mogul with a mountain of money to spend.

Grover is BusinessWeek's Los Angeles bureau chief. With reporting by Tom Lowry in New York