THE divorce of a celebrity couple could hardly be juicier than the corporate battle that began on March 10th in a Delaware court. Actually, the protagonists are a celebrity couple, of sorts. One is Barry Diller, an engaging former Hollywood studio boss, who revels in dealing with the media and has turned himself into an internet tycoon; the other, John Malone, was once Mr Diller's biggest fan and is a hard-nosed, limelight-avoiding, tax-hating media boss who first made his fortune in cable television, but has since acquired a taste for fighting with his fellow moguls.
At issue in court is Mr Diller's plan to break the internet-media conglomerate he runs, IAC/InterActive Corp, into five pieces. Mr Malone's Liberty Media has a 30% shareholding in IAC and 62% of the votes. The question is, having formally delegated control of those votes to Mr Diller in 2005, can Mr Malone take them back now he is at odds with his former protégé? Mr Malone, the first witness to testify, accused Mr Diller, who has a 3.8% stake in the firm, of breaching his stewardship obligations and running IAC as if he owned it.
Mr Diller's supporters say Mr Malone's claim—that the break-up is an attempt to disenfranchise him—is spurious, and that what Mr Malone really wants is to negotiate an exit that favours Liberty at the expense of other shareholders. In particular, Mr Malone is said to want IAC's Home Shopping Network as his price for going away.
Mr Malone accused Mr Diller of “aggressive” use of the corporate jet, and said that his pay “raised eyebrows”. What is clear is that after initially making a fortune for IAC's shareholders, including Mr Malone, Mr Diller has in recent years profited handsomely himself, even as IAC's shares have plunged. Having peaked at over $80 in 2004, IAC shares now trade below $20, though that is still higher than when Mr Diller took charge. Corporate-governance activists, whom Mr Diller loves to criticise, also describe him as overpaid by any measure: he took home $295m in 2006.
The days when Mr Diller could proudly claim to be the only old media boss to “get” the internet are long gone. The portfolio of internet brands he bought, from mortgage-market-exposed Lending Tree to eBay-exposed TicketMaster and Google-battered search engine Ask.com, increasingly seem off the pace, having largely missed out on the social-networking boom. The only cool thing about Mr Diller these days is the “Diller-Plex”, IAC's funky new Manhattan office, designed by Frank Gehry.