To get back in the good graces of the FCC, John Malone has sharply reduced his voting interest in DirecTV and resigned as Chairman and as a director of the company. By exiting DirecTV, Malone has satisfied the FCC’s objection to his effective control of both DirecTV Latin America and Liberty Cablevision Puerto Rico.
DirecTV Latin America had put its Puerto Rico operations in a trust last year to comply with the FCC’s ownership rules. The company will now be able to remove those operations from the trust.
Malone, his wife and two trusts for the benefit of his children exchanged 21.8 million shares of super-voting Class B shares for regular Class A shares of DirecTV. That reduced his voting stake from 24.3% to 3%. We may not know whether he holds onto those shares or sells them, since he is no longer a 5% owner, nor a principal and subject to making public SEC filings about his dealings in DirecTV stock.
Along with Malone, Paul Gould and Greg Maffei, both Malone associates, resigned from the DirecTV board of directors.
The company announced that President and CEO Michael White had been elected Chairman of the Board as well. Former PricewaterhouseCoopers Global CEO Samuel DiPiazza was added to the board as a director.
Malone became involved in DirecTV in 2008 when his Liberty Media acquired the stake formerly owned by News Corporation in a swap of assets that removed him as a major shareholder of News Corporation. Then last year Liberty Entertainment was split off from Liberty Media and merged with DirecTV. That move simplified DirecTV’s structure, but also created the FCC ownership issue that has now been resolved by Malone reducing his DirecTV stake and leaving the board.