In the swirl of news from Liberty Global last week, I retweeted a friend’s funny meme of actor B.J. Novak’s face morphing, slowly, into an expression of utter bewilderment. The tweet: “The world, trying to keep up with John Malone’s accounting prowess.”
It’s a common reaction by investors and analysts, and has been over the many years the veteran dealmaker has been in action. The chairman of one of the largest cable operators in the world, Liberty Global, Malone is known for acquisitions and stock transactions so dense they’d make a normal investor’s eyes squint from the brain-numbing complexity.
Often, the deals are contorted to avoid taxes, an anathema to the 74-year-old libertarian whose ideology is embedded into the very name of the company he runs: Liberty (read: freedom, independence and choice).
Liberty Global unveiled plans last week to increase its stake in studio Lionsgate, giving it 6.8% control with Discovery Communications, and a few days later, Malone’s Liberty Media split into three tracking stocks, which “track” the financial performance of various business units rather than the company as a whole.
Many like to credit Malone with having an elaborate road map for the Future of Media, or believe he has somehow figured it all out and is now slowly executing on a carefully crafted plan that was years in the making.
But Malone isn’t clairvoyant. (He regrets not taking over Netflix with a hostile bid when it was trading below $10.) He doesn’t have a crystal ball or any magic beans.
What he does have is a restless curiosity about the flow of money in the TV business, paired with an intensely mechanical mind. (As a teenager, he disassembled TVs and once took apart, piece by piece, the transmission of a 1952 XK Jaguar and fixed the broken gear with a welder and electric grinder.) And he has a knack for exploiting opportunities when they present themselves.
Someone once made a comparison of Malone I’ve used often: If 21st Century Fox chairman Rupert Murdoch is like a shark, constantly swimming and doing deals to survive, then Malone is more like an alligator, waiting patiently in the water hole until his prey comes within striking range.
The King of Cable became a satellite kingpin, for example, when Liberty Media acquired a controlling stake in Direc-TV from Rupert Murdoch’s News Corp. in 2008. After being forced out of that position by the FCC, he jumped into the only pay TV market where he saw growth: abroad. And when a block of Charter Communications stock came up for sale, he jumped back into U.S. cable.
Creativity, not clairvoyance. More MacGyver than media mogul. The same force now drives his consideration of Lionsgate, Starz and Discovery. He told me recently in New York he wants to be “a synthesizer … trying to understand what fits with what … You’re always trying to say ‘Gee, could you create something interesting, unique or more valuable by doing this over here and this over here?’ ”
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