Liberty Grabs Disney Deal From Viacom

Mark another notch on John Malone’s belt.

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

Liberty’s Encore pay TV service has reached a seven-year deal with Walt Disney Co. for exclusive 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.

Viacom’s Showtime now has exclusive rights to Hollywood and Touchstone films. It apparently refused to match the Encore offer, which could cost $1.1 billion to $1.5 billion, sources said. “Encore made a very competitive offer,” said Hal Richardson, Disney’s senior vice president of worldwide pay TV.

Encore 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.

Liberty is backing QVC Network’s bid to break up Viacom’s merger accord with Paramount Communications. Two weeks ago, TCI agreed to launch a cable music channel with Bertelsmann Music Group, which could compete with Viacom’s MTV Networks. “This is the second shot across Sumner’s bow that he could say is intended to undermine his asset and drive down his stock price,” a Hollywood executive said.