Well, it’s time. With heads bowed and hearts, perhaps, heavy, longtime partners Barry Diller and John Malone will appear in Delaware chancery court today, where a judge will help the two moguls, who have been financially intertwined for the past twenty years, make up or break up. The court visit comes after a lengthy and sometimes ugly public battle, during which Malone maligned Diller’s lavish lifestyle and Diller called Malone “crazy,” among other things. For two well-regarded, exceedingly clever businessmen, it has been something of an undignified spectacle. Why, many are asking, couldn’t they just work it out?
“Malone usually negotiates something,” April Horace, an analyst for Janco Partners, told the Times today. “It does surprise me that this particular time he has not been able to.”
But unlike other surprising breakups with much at stake, such as the Aniston-Pitt split of 2003, or the Phillipe-Witherspoon divorce of 2006, Diller and Malone have never presented a perfect façade to the public. In fact, they’ve been down this road before. Like in 2004, when they faced off in Delaware at the Disney shareholder trial. But in the past, though their massive egos and polar personalities have cleaved them apart, their mutual love of monumentally complex deal structures always brought them back together.
But now, something has come between them. Something sexier, even, than Angelina Jolie: money. Also, pride.
IAC, the Internet conglomerate founded by Diller with backing from Malone that includes properties such as Ask.com and Lending Tree and the Home Shopping Network, is worth around $5.4 billion. For many years Diller and Malone enjoyed a mutually beneficial and completely confusing relationship in which Diller had most of the power to run the company, but Malone had most of the vote (at least until 1995, when Diller somehow got him to sign over control of his vote to him). Anyway, fast-forward to November, when Diller announced a plan to spin four IAC properties off into a new company. Fair enough! Malone said. Good plan! Except then he noticed that the new corporation wouldn’t have the dual-class voting structure that enabled Malone to have a majority vote. So was Diller restructuring because it was better for the companies and the shareholders, or was he doing a sneaky thing and wresting control from Malone? Where is the trust?
If the judge thinks Diller was playing hanky-panky, Barry could lose not just Malone, his life partner, but also his job, not to mention the company he has spent more than ten years building. Now that’s a breakup with severe repercussions.