Liberty Grabs Disney Deal From Viacom

John Malone has put another notch on his belt.

His Liberty Media Corp. is snatching an important programming supplier away from Viacom Inc., even though Viacom last week filed a massive antitrust suit against Liberty and related companies, alleging “bully-boy” tactics.

Liberty’s Encore pay television service is expected to announce today that it has reached a seven-year agreement with Walt Disney Co. for exclusive pay TV rights to its Hollywood and Touchstone movies, beginning in 1997. In addition, Disney’s Miramax movies will be shown on Encore for 10 years beginning next year.

The Disney pact could cost Encore more than $1 billion, one company source said.

Viacom’s Showtime--which currently has exclusive rights to Disney movies--was unwilling to match the Encore offer, pay TV industry executives said.

Encore, a relative newcomer to pay TV, started in 1991 with the backing of Malone’s Liberty Media and wide exposure from Tele-Communications Inc., the nation’s largest cable TV company, where Malone serves as chief executive.

Malone “has the advantage of his distribution on TCI that no other programmer has. We don’t. That’s why he can make or break a cable programmer,” said Viacom Chairman Sumner Redstone.

Encore has also signed a long-term agreement with New Line Cinema, which recently agreed to be acquired by Turner Broadcasting System, in which Malone’s TCI holds a 20% stake.