Media ownership changes could spur 'feeding frenzy'. (Media & Technology).

Bargain hunters are out in droves, looking to pick off pieces or buy entire media companies that looked unattainable 12 months ago.

Like shoppers in Filene's Basement, there's some sparring and occasional teamwork among the moguls--including Barry Diller, John Malone and Rupert Murdoch--who are eyeing assets like DirecTV, the satellite television business owned by General Motors' Hughes Electronics Corp., and the U.S. entertainment holdings of Vivendi Universal SA. Media investors and analysts anticipate a flurry of transactions as companies shed assets to improve their balance sheets.

"It's a good time to have capital and try to buy some things' said Sal Muoio, manager of the SM Investors fund in New York. "We have a year when some assets are going to be shuffled, unlike last year when things were tied up."

There are gems to be found in the likes of Acme Communications Inc., a television broadcast company encumbered with debt. Acme has agreed to sell its crown jewel, KPLR-TV in St. Louis, Missouri, and a Portland, Oregon, station to Tribune Co. for $275 million in cash.

Who will rule?

More consolidation in the broadcast and cable TV industries is anticipated if--as many expect--the Federal Communications Commission votes to relax media ownership rules later this year.

"This is going to be a feeding frenzy," Muoio said. This being show business, speculation is rife about executives at the top. Will Viacom President Mel Karmazin sign a new deal, and on what terms, to continue working for feisty chairman Sumner Redstone?

Will Michael Eisner remain at the helm of the Walt Disney Co. for a 19th year?

How will AOL Time Warner Inc. Chief Executive Richard Parsons succeed Steve Case as chairman of the troubled media giant given the uncertainty over perceptions of Parsons' ability to handle both jobs?

At the division level, executive changes are quickening. Andrew Lack, president and chief operating officer of General Electric Co.'s NBC, accepted the top post of Sony Music Entertainment, vacated only a day earlier by Thomas Mottola.

But most eyes follow the moguls who can buy and sell assets. How much longer will Barry Diller wear dual hats as chairman of USA Interactive and interim co-chief executive of Vivendi Universal's U.S. businesses?

Does Diller secretly yearn to be a studio boss at Universal, after heading Paramount Pictures for a decade and then Fox for eight years?

Diller addressed his Hollywood plan in a brief telephone interview. "I don't have a big ambition to run an entertainment media company," he said. "It interests me, and if everything was aligned in orbit, I would have some interest in some role but not chief executive."

Twelve months ago, DirecTV and Vivendi's entertainment assets looked untouchable. Hughes was betrothed to EchoStar Communications Corp. in a merger agreement, while Vivendi Universal Chairman Jean-Marie Messier was still contemplating a long career at the helm of the media company he had assembled from Seagram Co., Canal Plus and the entertainment assets of Diller's USA Networks.

But a cash crunch precipitated Messier's ouster in July, and the Hughes-EchoStar merger was terminated last month due to antitrust challenges from government regulators.

In each instance, it didn't take long for fresh proposals to float in newspaper articles and investor conferences. Malone's Liberty Media Corp. publicly declared its interest in taking a controlling stake in both the U.S. entertainment assets of Vivendi Universal and DirecTV, possibly with partners. Liberty Media Chief Executive Robert Bennett has reiterated an interest in bidding for DirecTV, preferably in tandem with Murdoch's News Corp., which it backed in a previous bid. Liberty Media owns an 18 percent stake in News Corp.

Bennett said that the company has "potential interest" in acquiring the U.S. assets of Vivendi Universal or becoming a partner.

Angling for position

Even before Messier's ouster, the Wall Street Journal Europe reported from the Paris rumor mill that Liberty Media, Diller and former Seagram Chief Executive Edgar Bronfman Jr. might orchestrate a bid. Diller told a Salomon Smith Barney conference that his USA Interactive and Vivendi might dismantle their partnership and "make a new one that would give us a participation in the business."

At the time Diller sold his entertainment assets to Vivendi Universal, the USA Interactive chief was named chairman of a partnership called Vivendi Universal Entertainment and gained certain veto rights over the sale of assets for a number of years. Evidently he now is willing to consider swapping: those "veto" rights for equity.

But other bids could materialize. An investor group led by Los Angeles billionaire. Marvin Davis, onetime owner of 20th Century Fox Film Corp., held conversations with Vivendi last fall about a possible bid. Another meeting is expected to take place late this month, most likely in Paris. At the Salomon conference, Diller made a disparaging remark about the "fat Marvin Davis" and his bid. The two men have made no effort to hide their mutual disregard, dating from the days when Diller ran the Davis-owned Fox studio. Still, it was an uncharacteristic slip for the USAI chairman, who can be withering in private but is notably gracious in public appearances.

Diller issued an apology, but not before Hollywood buzzed with speculation that Diller might regard Davis as a serious bidder instead of the "tire-kicker" so often portrayed. A bid by Davis could drive up the asking price for Vivendi's entertainment assets if Liberty Media, a valued USAI shareholder, proceeds to make an offer. Backbiting? Public apologies? How refreshing, after a year of bankruptcies and executive dismissals for suspected fraud or wrongdoing.