The satellite radio company’s shares are up 11.4% since early Thursday while other NASDAQ stocks collectively are down 4.4%. What’s going on? Well, it seems that many analysts who attended Liberty Media’s annual dog-and-pony show for them on Thursday came away convinced that Sirius XM is preparing to see John Malone lift his company’s 40% stake well past 50%. He has to wait until March to avoid taking a tax hit on such a move — and we all know how much Malone hates to pay taxes. After that there’d be a tax advantage: Sirius has $8B in net operating losses that could be used to shelter future payments. That’s great now, although the losses “sucked” when the company was racking them up, CEO Mel Karmazin told Liberty investors at last week’s gathering. So, is Liberty interested in buying Sirius? A lot of comments that Liberty CEO Greg Maffei made last week sure make it sound that way. “There are few businesses that I have as much confidence in,” he said. ”Boy, it’s got a heck of a tail wind behind it. Find me another business” with as much opportunity. Sirius’ first consumer rate hike, coming in January, ”is a great opportunity and there’s a potential for more…(Profit) margins will expand….It’s our kind of business.” He added that his company
Investors seemed to like what they heard at today’s annual confab for John Malone’s Liberty Media. Shares of the hodge-podge of companies it either owns or controls were up on a day when the market was shaken by new fears that the European debt crisis will widen. Liberty Starz ended the day +1% and Liberty Capital was +0.5% after their parent said it will combine the two tracking stocks into a single asset-based security. But Live Nation was +6.7%, Barnes & Noble was +5%, and Sirius XM was +4.8% following CEO presentations to the Street.
Malone was more subdued than usual. But the executive who became a billionaire on the back of his devilishly complex deals — often to help him avoid paying taxes — got a chuckle in his response to a question about whether the changes in his tracking stocks will make their businesses confusing for investors. “We’ll get as complicated as we need to get to highlight value.” he said.
Sirius XM’s Mel Karmazin won the biggest laughs, though, with
This will give Liberty Media Chairman John Malone and other executives a lot to talk about later this morning at the company’s annual dog-and-pony show for investors. The decision to convert Liberty Starz and Liberty Capital from tracking stocks into a single asset-based stock should diminish the growing sense that Malone was fattening up Starz for a big deal — possibly a sale. The channel has been investing heavily in original programming, and Liberty Starz just unveiled a $1.5B credit facility. Janney Capital Markets analyst Tony Wible says that the Street “likely will be mixed in how it interprets the news” of the change in Liberty Starz’ status. Meanwhile, Liberty’s $1.25B stock repurchase “should help ease (investors’) concern.” And hope springs eternal: Miller Tabak analyst David Joyce says that “in time we would expect M&A activity with these assets to pick up again.”
Here’s the company’s release:
ENGLEWOOD, Colo. — Liberty Media Corporation (Nasdaq: LCAPA, LCAPB, LSTZA, LSTZB) (“Liberty”) today announced that its board of directors has unanimously voted to eliminate Liberty’s tracking stock structure by converting each share of its Liberty Starz common stock into 0.88129 of a share of the corresponding series of Liberty Capital common stock, effective at 5:00 p.m., New York City time, on November 28, 2011 (the “Conversion Date”). Cash will be paid in lieu of fractional shares.
Ted Turner seems destined to be one-upped by his longtime ally, Liberty Media’s John Malone. First it was in media, where Malone remains a player long after Turner was pushed out of Time Warner. Now Malone has passed Turner as the nation’s biggest private land owner — a title the founder of cable channels including CNN, TNT, and Cartoon Network held since the 1990s — according to The Land Report. Malone bought more than 1M acres of timberland in Maine and New Hampshire this year, bringing his total land holdings to 2.2M acres. That passes Turner, who has more than 2M acres, mostly in Montana. Malone tells the publication that he caught “this land-buying disease” when he toured Turner’s ranch two years ago. The Land Report’s annual survey of the largest private U.S. landowners just looks at acreage owned by individuals, families, family-owned companies, and family-controlled foundations.
It’s “more likely than not” that new online video streaming providers such as Amazon will offer some programming on a premium tier — a contrast with Netflix’s single-price package – Liberty Media CEO Greg Maffei said this morning at the Goldman Sachs Communicopia conference. He broadly hinted that his company’s desire to charge extra for Starz was a big reason why the premium channel recently ended negotiations to extend its carriage deal with Netflix. The current arrangement, he says, is “inconsistent” with the way consumers receive Starz on pay TV.
More broadly, Maffei says that Liberty is on track to split off its Liberty Capital and Liberty Starz tracking stocks by tomorrow now that it has beat back a court challenge by bondholders. The deal transfers some assets to the spun-off companies, violating some bond agreements. But the Delaware Supreme Court yesterday upheld a lower court decision that said the split-off is OK because it isn’t part of what it called an “overall scheme” to hurt bondholders. That likely won’t change the overall strategy for the company that’s controlled by the famously tax-averse former cable titan John Malone — and that some analysts say is little more than a portfolio of stock holdings. “Finding things to buy at attractive prices is the biggest chalenge we have today,” Maffei says.
Those who remember Liberty Media Chairman John Malone from the days when he was the swashbuckling King of Cable like to think of him as a strategic mastermind who still wants to shape the future of media. But lately he’s looked like a guy who simply wants to collect and trade media assets as though they’re baseball cards — especially if he can do so in a way that doesn’t also require him to pay taxes.
In presentations today and yesterday, Malone and Liberty CEO Gregory Maffei provided little to suggest that that there’s a vision behind the $1 billion offer they made last week for 70% of bookseller Barnes & Noble — or even whether they hope to manage it in a way that would complement their collection of corporate spare parts that includes QVC, Starz, and the Atlanta Braves, as well as major stakes in Sirius XM and Live Nation. Maffei told a Barclays Capital investor conference that “a lot of interesting things” can be done with B&N’s stores, including selling Nook e-readers and “Nook-related devices.” Asked whether he expects the Nook to overtake Amazon’s Kindle or simply slog ahead as the No. 2 e-reader with about 25% of the market, Maffei says “both.” Malone was a little more helpful yesterday when he told his company’s shareholders that book publishers have “a strong vested interest in not allowing too much concentration in one hand in the …
Liberty Media chairman John Malone is probably getting an earful from his pals in the cable industry this afternoon after he made a comment that’s sure to haunt both him and them. Talking to Wall Street analysts about the growing number of consumers who buy high-speed Internet services from cable companies, Malone said that “cable is pretty much a monopoly now” in broadband. Oops. The executive who once was considered such a monopolist in cable TV that Al Gore referred to him as Darth Vader caught himself, adding, “I don’t want to use that word.” But he may be reminded that he used the M word every time consumer advocates call on federal regulators to crack down on cable — for example, by insisting on net neutrality rules. Malone says consumers won’t cut the cord with cable even as services including Netflix offer movies and TV shows over the Web. Phone companies such as Verizon and AT&T “are not going to aggressively” build out fiber-optic services that could match the speed and security of cable’s broadband, he said. Meanwhile, “the threat of wireless broadband is way overblown. There just isn’t enough bandwidth” for them.
In contrast to Malone’s blunt comments, other Liberty executives said they wouldn’t provide many details about Starz’s new lawsuit against Dish Network. Starz, and in a separate suit Disney, allege that Dish violated their contracts by giving satellite customers free access to the premium channel for about a year. Starz CEO Chris Albrecht says that his company didn’t lose money; Dish pays a fixed annual rate to offer Starz and Encore. But the additional viewers may have helped Starz’s ratings.
One-time Hollywood mogul and now Internet salesman Barry Diller announced today he has stepped down from his role as CEO of the IAC/InterActiveCorp. IAC said Diller has been replaced as CEO by Greg Blatt, formerly the CEO of the online dating site Match.com. Diller stays on as chairman of IAC. In addition, Liberty Media Corp dumps its 60% stake in IAC for the company’s Evite and Gifts.com businesses and about $220 million in cash. The exchange was designed to be tax-free to both IAC and Liberty since John Malone is so obsessed about paying corporate taxes. And Malone also detests Diller, who hilariously thanked his former legal sparring partner ”for his support and encouragement throughout (with one brief period of mutual discontent which we both believe was an aberration).”
NEW YORK and ENGLEWOOD, Colo., Dec. 2, 2010 — IAC and Liberty Media Corporation announced today that Liberty has exchanged its entire equity stake in IAC for a combination of operating assets and cash in a transaction intended to be tax-free to Liberty and IAC. Pursuant to the transaction, completed on December 1, Liberty exchanged approximately 12.8 million shares of IAC stock (consisting of approximately 8.5 million shares of Class B stock and 4.3 million shares of common stock, and representing approximately 60% of the total votes of all classes of IAC stock) for all of the capital stock of a wholly-owned subsidiary of IAC that holds the Evite and Gifts.com businesses, and
EXCLUSIVE: Ascent Media is the international conglomerate offering integrated digital media services including digital asset management, post production, content duplication and distribution services that was spun off as a publicly traded company in 2008 by its former parent Discovery Holding, which is controlled by Liberty Media chairman John Malone. U.S.-based film Deluxe is owned by Ron Perelman’s MacAndrews & Forbes Holdings and is the world’s largest processor of 35mm film and distributor of release and trailer prints for the worldwide film industry. My sources say this transaction for Deluxe “appears imminent. They are buying the bulk of Ascent Media’s assets minus distribution and some creative services. Though Perelman has been getting nutty at the 11th hour with demands.” (I hear India’s giant Reliance was “hot and heavy in the mix” when Ascent Media was being shopped around during the months-long process.) As usual with anything that Malone does deal-wise, the sale will have as small a tax consequence as possible given his phobia about paying corporate taxes. Britain’s Broadcast media outlet first reported in September that Deluxe was talking to Ascent Media UK about a possible takeover in “a deal that would almost certainly create the biggest single player in the UK facilities market”. But the transaction is actually much, much bigger.
ENGLEWOOD, Colo – Ascent Media Corporation today announced the execution of a definitive agreement to sell the Creative Services and Media Services businesses of Ascent Media Group to Deluxe Entertainment Services