News Corp.'s Sweet Liberty

Updated from 9:44 a.m. EST

Rupert Murdoch finally made it official Friday.

News Corp. (NWS Quote) will divorce Liberty Media (LCAPA Quote), ending a relationship that started off sweet and then turned sour.

Under the terms of the widely expected agreement, Liberty will exchange its entire 16.3% stake in News Corp. -- about 324.6 million Class A shares and 188 million Class B shares -- for a 38.5% stake in satellite operator DirecTV (DTV Quote). Liberty also will receive $550 million in cash and regional sports networks in Denver, Pittsburgh and Seattle.

News Corp., the owner of properties such as Fox News, 20th Century Fox and the New York Post, said the deal will unlock "tremendous value" because it will immediately add to earnings; allow it to sell its stake in DirecTV at an attractive valuation on a tax-free basis; and help it accomplish an $11 billion stock buyback, representing 16% of its outstanding stock.

Andrew Baker, an analyst with Cathay Financial, was less enthusiastic.

"It's not bad for shareholders -- it's not a great deal, either," says Baker.

He estimates that News Corp. shareholders are giving up $12.6 billion of value -- the market value of DirecTV shares before the deal became public, its cash and the value of the regional sports networks -- for roughly $11.2 billion in News Corp. stock.