John Malone's Fox Hunt

While Univision's(UVN Quote) troubled auction is front and center for media dealmakers, another transaction looms on the horizon this summer.

News Corp. (NWS Quote) appears open to the idea of offloading some 10 small-and medium-market TV stations. And Liberty's (LINTA Quote) John Malone appears to be happy with the prospect of wrangling a deal for cash and some stations from Rupert Murdoch in return for his 18%, or $10 billion, stake in News.

Sources caution that a Malone/Murdoch deal isn't imminent. Given the experience of Univision -- which sought to induce a bidding war for its fast-growth broadcast properties, but has found little interest outside of bickering private equity types -- it's not clear how soon a transaction might take shape.

But if a News Corp./Liberty deal is negotiated, it would settle a long-simmering dispute between Murdoch and Malone. Malone shocked Murdoch two years ago by quietly shifting his longstanding nonvoting stake in News Corp. into a voting stake. A chastened Murdoch quickly put in a poison pill to keep Malone at bay.

A deal would be attractive for Liberty because of its tax efficiencies and because it is said to want to be in cash-generating businesses. The stations would certainly qualify.

Fox owns 35 TV stations, including ones in many major U.S. markets. The group throws off lots of cash and remains profitable.

Fox News Chairman Roger Ailes told UBS analysts last week that an exchange of a portion of News Corp. television stations for Liberty's voting stake in the company remains a possible near-term resolution. Sources say Fox wants to hold onto its stations in places like New York and Los Angeles.

The Federal Communications Commission is likely to soon approve the transfer of TV stations broadcasting licenses from Murdoch himself to News Corp., which is now incorporated in the U.S. from its native Australia. Murdoch personally holds the licenses because he is a U.S. citizen.