In a Week of Great TV and the Super Bowl, Diller vs. Malone is the Classic Battle

Lostpremiered with big numbers. American Idol, while slipping, is sure to gain traction as audiences fall in love again. While press reports suggest the end is near for the Writers Guild strike, I don’t believe it. Much as I wish a formula could be determined that satisfies both sides, it seems like there is too much distance between the sides. With no blockbuster film in the running for an Academy Award, February 24 looks like it will come and go with barely a ripple in the box office.

Fortunately, the strike has no impact on Super Sunday. No writer could have conjured up a script equal to the drama of Sunday’s game. An undefeated team with a quarterback worthy of Hollywood stardom. A New York underdog team with a bunch of relative no-names and an underperforming quarterback who has lived in the shadows of a superstar older brother. This is a game that network executives lust after and advertisers pray for. Strike or not, with American Idol, Lost and the Super Bowl, this week is one of the best network TV has experienced in a long time. And to top it all off, we have Super Tuesday, February 5. By Wednesday, it’s very likely we will know who our Presidential candidates will be – and again we realize how valuable live television – and instant access to news – is in our lives. Super Tuesday; Super Bowl, Lost, American Idol. Even if we have TiVowe watch them live or on very short delays. We watch the commercials because they are as interesting and relevant in many cases as the programs. This week, we’re being reminded again and again that television is the engine that pulls the digital train.

But for all the hype and excitement surrounding television this week, plus the hundreds of stories about companies, investments, executives, economic conditions and more, the one I’m fascinated by is the Barry Diller and John Malone soap opera. You can search “Diller Malone” and read up on the details, and you should. I assure you there are many writers who are locking into this battle of corporate titans, with books and made-for-TV movies almost certainly on the horizon.

John Malone and Barry Diller are two executives you would not bet against. Although Diller lost a bitter battle with Sumner Redstone to acquire Paramount Studios, he tends to get what he wants. And for nearly a quarter century Malone was one of the most powerful and feared executives in the world. I first met John Malone during a wicked Denver blizzard in January 1984. We were stranded at the TCI headquarters with just a handful of people. John, unshaved and with shoes off, spent hours sharing his plans and strategies for the next decade. They unfolded exactly as he had scripted them. TCI acquired cable system operations until Malone controlled the largest cable subscriber base in the country. He invested in cable programming networks and defined the technology advances (or lack of advances) for the cable industry.

Ten years later I asked Malone what was next, and he said: “Two words – Liberty Media.” For the past decade, Liberty Media has been a roller coaster, a complex collection of assets derided by Wall Street as Malone shifted from strategy to strategy. Today, Malone and his Liberty Media are battling to wrest control of Inter-Active Corp (IAC) from his old crony, Barry Diller. Malone and Diller were strange bedfellows to begin with. There could not be two more dissimilar executives, in both their professional and their personal lives. Not to say there is anything wrong with the way either runs their respective businesses or their lives, common sense should have dictated that these two men should not enter into a relationship that enabled one to control the destiny of another.

Diller insisted on controlling Malone’s influence over IAC for exactly the reasons that are playing out now. The battle was inevitable from day one. But that makes it no less engaging and no less a subject for future articles and books.

The key difference is that Malone, who Al Gore referred to as Darth Vader, no longer wields the dominating power he once did. His railing against Diller seems like the desperate pleas of an over-the-hill heavyweight boxer who begs for one last chance in the ring. And while Diller may still be in the ring, he’s no longer in the heavyweight division. He finds himself battling against lesser opponents but no longer able to dominate them the way he once did. Instead he simply seems confused, flailing his arms hoping for a knock-out punch as his corporate assets lose steam one-by-one. Yes, I know IAC has some valuable corporate treasures, but Diller has not been able to extract their value. His frustration is showing… and so is Malone’s.

Their battle has brought these two veteran corporate pugilists back into the limelight. Their fight strikes me as a corporate version of Britney and Paris, battling to see which can generate the most bad publicity. Ultimately, Malone and Diller will work out a deal, just as eventually the Writers Guild and the AMPTP will find a solution that returns writers to work. In the meantime, we have interesting diversions, good content to write about, and the disconcerting sense that these two corporate giants who helped build the foundation of our booming TV and digital media marketplace are sadly irrelevant.