Liberty Media to Swap Assets with CBS, Time Warner

Liberty Media's shares rose 2.5% yesterday on news that the company will swap assets with Time Warner and CBS. Liberty will swap about 60 million Time Warner shares for the Atlanta Braves, $1 billion in cash and a magazine; while CBS will swap a TV station and $170 million in cash for Liberty's CBS shares. In December, Liberty swapped its News Corp. stake for a controlling stake in satellite operator DirecTV, $550 million in cash and three sports networks. This rapid series of tax-free swaps appears part of a strategy to change Liberty's profile from a holding company with passive investments to an active operator of media businesses. Some analysts believe if Liberty continues to accumulate sports properties, it could launch a viable rival to Disney's ESPN. The Braves deal, which will cut Liberty's stake in Time Warner to about 2.6% from about 4%, is the product of more than a year's negotiation.

Sources: Bloomberg, MarketWatch, Reuters
Commentary: Report: Liberty Media Looking To Buy Cablevision's Rainbow Unit • Views On Liberty's DTV Swap • Making Sense of the Liberty Empire, Part 4: Making Capital Out of Liberty Media
Stocks/ETFs to watch: Liberty Media (LCAPA), CBS owner Viacom Inc. (VIA), Time Warner Inc. (TWX), The Walt Disney Company (DIS).ETFs: PowerShares Dynamic Media (PBS), PowerShares Dynamic Leisure & Entertainment (PEJ)

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