To promote “a stronger currency and allow greater flexibility to pursue our strategic objectives,” Liberty Media announced Wednesday that its board of directors has authorized spinning off subsidiary Liberty Entertainment as a separate, publicly-traded company that will hold Liberty’s 50% stake in DirecTV. In addition to the DirecTV stake, the spin-off entity, to be known as Liberty Entertainment Group (LEG), will hold 100% of Starz Entertainment, FUN Technologies and Liberty Sports Holdings and interests of 37% and 50%, respectively, in satellite broadband provider WildBlue Communications and cable network GSN. Since March, Liberty Media has managed its entertainment assets as one of three company tracking stocks (the others being Liberty Interactive and Liberty Capital) that are intended to allow investors to follow closely Liberty’s various lines of business. Since last month, board members have explored a potential spin-off as a means of closing the gap between the market value of the entertainment tracking stock and the intrinsic value of Liberty’s entertainment assets. The transaction, which is intended to be tax-free to shareholders, would involve the exchange of all outstanding shares of Liberty entertainment tracking stock for shares in the new LEG entity. Observers also believe that the move could serve as a stepping stone toward the union of LEG and DirecTV as a single trading entity, as one analyst pointed out that “a hard spin of [LEG] should theoretically improve [LEG’s] valuation, making a potential [DirecTV] transaction less dilutive to Liberty shareholders.” The spin-off is slated for completion in three to four months.