Megawatt Mogulfest

Talk about a chance encounter. It was a megawatt group of Masters of the Media Universe, and what they might have been plotting is anybody's guess. In any case, there they were-AOL Time Warner's chairman Steve Case, CEO Jerry Levin, the company's co-chief operating officer Richard Parson and Chief Financial Officer Mike Kelly-assembled all at once in the 29th-floor executive sanctum of the world's media behemoth.

Nothing unusual there, except maybe that Case had ventured up to the newly combined AOL Time Warner's New York head quarters from Dulles, Va., where he has elected to keep his office.

No, the noteworthy aspect of this Feb. 7 gathering lay in the identity of the guest they'd just finished meeting with: none other than the King of Media Dealmakers, Liberty Media boss John Malone.

This mogulfest has lots of potentially monumental media stuff to discuss-megasize assets to split up, subdivide or cobble together-as well an array of friends and foes to conspire with and against.

This mogulfest has lots of potentially monumental media stuff to discuss-megasize assets to split up, subdivide or cobble together-as well an array of friends and foes to conspire with and against. Perhaps they were swapping insights about the latest ambitions of Rupert Murdoch, chief of News Corp, who is reportedly close to completing a deal to merge his global satellite-TV business with General Motors' Hughes Electronics and its DirecTV business-a reported $70 billion transaction. After all, Malone and AOL Time Warner each have a direct interest in the outcome. For one thing, Malone is reportedly participating in the satellite-TV deal. (GM firmly denied a deal with Murdoch and says it is still negotiating to sell Hughes to other unnamed parties). AOL, meanwhile, was once reported to have been considering a bid for DirecTV, in which it purchased a 5 percent stake long before acquiring Time Warner.

Then again, maybe Case and his AOL Time Warner colleagues were simply briefing Malone, one of the company's largest shareholders, on AOL Time Warner's emerging strategy. These days, the execs appear to be briefing everybody in sight, from reporters to Wall Street analysts to cable executives. Malone, a master strategist, could benefit immensely from first-hand knowledge of where AOL Time Warner may be headed. Malone holds stakes in media and communications powerhouses ranging from Murdoch's News Corp. to Vivendi Seagram. There's dealmaking opportunity between any of those companies and AOL Time Warner. Or Malone could be trying to broker an arrangement between AOL Time Warner and AT&T, of which he is also a major shareholder.

Currently, AT&T and AOL Time Warner are trying to reach an agreement under which the latter would re-acquire the 25 percent stake that AT&T owns in AOL Time Warner's massive cable operations, HBO and Warner Bros. studio. AT&T and AOL Time Warner are obliged to separate this aspect of their close ties by government mandate.

The meeting broke up around 3 p.m., which suggests that maybe they all had simply socialized over turkey sandwiches, chitchatting amiably about how the new Republican FCC Chairman Michael Powell (son of Colin) plans to pretty much give moguls like themselves a free hand in the marketplace. Whatever their topic, none of the suddenly-media-shy barons seemed anxious to discuss their discussions. "You'd better run," Levin told Malone. "The press is here."