Liberty Media has acquired motorcycle racing championship company MotoGP, the company said Monday.

Liberty will acquire the Madrid, Spain-based MotoGP motorcycle racing outfit, which will be attributed to Liberty Media’s Formula One Group tracking stock, the company said. U.S.-based Liberty Media, chaired by John Malone, will acquire 86% of MotoGP,  with MotoGP management retaining approximately 14%. 

The transaction reflects an enterprise value for MotoGP of 4.2 billion euros ($4.5 billion) and an equity value of 3.5 billion euros (about $3.8 billion), according to Liberty. 

MotoGP, which launched in 1949, is expected to host 21 races across 17 countries during its 2024 season. Dorna CEO Carmelo Ezpeleta will continue to run the MotoGP business, Liberty said. 

As Bloomberg Media noted, Liberty Media bought Formula One in 2016 and has since expanded that circuit's reach in the United States, attempted to grow the sport’s popularity through digital streaming and struck gold with the Netflix show Drive to Survive. 

“We are thrilled to expand our portfolio of leading live sports and entertainment assets with the acquisition of MotoGP,” Liberty Media president and CEO Greg Maffei said in a statement. “MotoGP is a global league with a loyal, enthusiastic fan base, captivating racing and a highly cash flow generative financial profile. Carmelo and his management team have built a great sporting spectacle that we can expand to a wider global audience. The business has significant upside, and we intend to grow the sport for MotoGP fans, teams, commercial partners and our shareholders.”

Dorna's Ezpeleta added: “This is the perfect next step in the evolution of MotoGP, and we are excited for what this milestone brings to Dorna, the MotoGP paddock and racing fans. We are proud of the global sport we’ve grown, and this transaction is a testament to the value of the sport today and its growth potential. Liberty has an incredible track record in developing sports assets and we could not wish for a better partner to expand MotoGP’s fanbase around the world.”

 Just weeks after Charter Communications slashed prices for its Spectrum Mobile offering to $29.99 per month, chairman and CEO Tom Rutledge said charges for wireless cable offerings could drop further as the cost to provide service continues to decline.

“I think the mobile opportunity is very similar to the wireline opportunity that existed 15 years ago,” Rutledge said at the virtual/in-person Liberty Media Investor Day in New York. “Look at what happened there — we had a high-priced wireline phone service — in the metro area here, it was about $72 a month. That product now is less than $15 a month. And the biggest wireline phone companies in America are Comcast and Charter. So, I think the opportunity in mobile is similar. It’s got its own complexities, but the opportunity is there to create value for consumers. Consumers actually save money and we make money. That’s a pretty attractive business model that is available to us. And yeah, I think it leads toward convergence.” 

Charter introduced its $29.99 price point — for a minimum of two lines each — in October, a big discount from its previous charge of $45 per month, per line. That price reduction came on the heels of Comcast introducing a $30 per line service (for a minimum of four lines) which took effect in April. 

In a research note, Bernstein media analyst Peter Supino wrote that Rutledge’s comments provided “a muscular reminder of Charter’s ambitions and competitive advantages.” 

“Charter will sell wireless as aggressively as necessary to ensure that it achieves growth of customers and EBITDA per customer,” Supino added.

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Liberty Media chairman John Malone said that while convergence of fixed and wireless assets is common in Europe, where Liberty, a major Charter shareholder, has substantial holdings, it hasn’t yet taken hold in the U.S. While European companies have made bigger strides in deploying fiber networks compared to their U.S. counterparts, Malone stressed that every company and every market is different. 

“I’d start by reminding everybody that Europe is largely converged, the broadband companies are also wireless companies,” Malone said at the Investor Day. “That’s been true in every market we’re still operating in. In terms of technology, existing network structure, the nature of technological upgrade, the pressure from competition, etc. Every market is different.”

Malone added that in the U.K. for example, Liberty overbuilt itself with fiber, initially to capture more B2B business and because it was relatively cheap to build. The U.K., he said, also is relatively underbuilt — there isn’t a lot of fiber capacity and areas will be built out as opportunities present themselves. In the U.S., Malone said the biggest area for growth could be in boosting upstream capacity. 

“That may be more of a political reality than a business reality in the near term,” Malone said.  “And the cable industry contemplated that, and does have the capability of vastly expanding the upstream capacity.”

Malone said outside of the U.S., there has been a movement toward collectively building networks.

“In some places there is only one fiber backbone network that will be built and everyone will share and use it. So the models vary and in each location it depends on capital efficiency, the current state of play, cooperation between multiple players. It’s not uncommon. For instance in the U.K. there are four meaningful cell phone providers but only two networks, and those four competitors share  those two 2 nets as a matter of capital efficiency.”

Liberty CEO Greg Maffei added that the path U.S. cable companies have taken by upgrading using DOCSIS and other technologies to boost capacity and efficiency gives them some leeway before having to decide whether to go deeper into fiber expansion.     

“It’s a long ride for U.S. cable,” Maffei said. ■ 

Cable legend John Malone, just days after converting his super-voting shares in Discovery Inc. to common stock for no premium to help facilitate its merger with WarnerMedia, has agreed to sell his Class B shares on TV and online retailer Qurate Retail Group to long-time lieutenant Greg Maffei, for about $400 million in cash or stock.

News of the filing first appeared in The Information. 

Qurate includes the two largest home shopping channels -- QVC and HSN -- as well as online retailer Zulily, Cornerstone Brands and green energy and other investments. .  

Malone, 80, helped found the modern cable business as chairman of Tele-Communications Inc., and has left his mark on practically every major cable deal in the past 20 years. He agreed on May 18 to sell his Qurate super-voting shares, which give him 41% voting rights in the company, to Maffei for $14 per share, according to Securities and Exchange Commission documents. Qurate stock currently trades around $13 per share. According to the filing, Malone would get paid in either cash, stock “or such other form of consideration as to which Mr. Maffei and Mr. Malone may mutually agree.”  

Maffei, who is CEO of Liberty Media and chairman of Qurate and several other Liberty holdings, joined Malone in 2005 after stints at Microsoft,  360Networks and Oracle. The two have been partners on several big deals, including the 2013 purchase of a 27% interest in Charter Communications. 

According to the SEC document, Malone agreed to the sale on May 18, pending board approvals. The document added that while he supports Qurate’s long-term strategy, he wanted to accept Maffei's offer “because it would provide flexibility for certain long-term estate and tax planning goals in light of potential changes in federal tax laws.”

The document continued that the sale is contingent on the approval of Qurate’s board of directors. Qurate also has call rights to Malone’s Class B shares, and if the company exercises that right, Malone said he would prefer to receive payment in the form of Qurate common stock, “such that he would continue to hold a substantial investment in Qurate Retail.”

Malone earlier agreed to convert his Class B super-voting shares in Discovery, which usually carry 10 votes each, on a 1:1 basis into common shares for no premium, a move that helped Discovery move forward with its planned merger with WarnerMedia. In a statement after that deal was announced, Malone said that he neither asked for nor received a premium for converting his Discovery stake. 

“I believe we are creating real value for shareholders and a legacy investment for my grandkids,” Malone said in the statement. 

Discovery’s super voting shares usually trade at around the same price of its common stock, but in the past several months, because of a sell-off by hedge fund Archegos Capital (which also shorted ViacomCBS stock), their value has soared. Bloomberg estimated that Discovery’s Class B shares have traded as high as $128 each at one point -- more than four times the Class A share price of around $32 per share. By converting his Class B shares on a one-for-one basis, Bloomberg estimated that Malone could lose about $280 million on the deal. 

That is in contrast to Discovery’s other major holder of super-voting shares -- Advance Publications, controlled by publishing giants the Newhouse family -- which according to Bloomberg will receive 13.1 shares of the new entity for every Class B share they own. Advance also will receive  the right to nominate two board members to the new entity.

Some analysts saw Malone’s Discovery deal as his way of helping to push the transaction forward. And he still will be a large shareholder after the deal closes, meaning he will participate in any upside in the stock price in the new entity. Some have predicted that the new Discovery-WarnerMedia could be valued at as much as $46 per share, well above the current $32 price of the stock on Thursday. 

Liberty Media CEO Greg Maffei saw his total compensation rise about 7% in 2020 to $47.1 million from $44 million, fueled mostly by stock awards and other incentive payments, according to the company’s proxy statement filed with the Securities and Exchange Commission April 14. 

Maffei’s annual base salary fell 27% to $871,880 in 2020, compared to $1.2 million in the prior year, but he received a big bump in his stock awards -- $8.3 million compared to $3.6 million in 2019. Maffei also received $11.3 million in non-equity incentives in 2020, compared to $8.4 million in 2019.

Other Liberty Media executives saw even bigger increases in total compensation. Chief Accounting Officer and Principal Financial Officer Brian Wendling received $2.4 million in total compensation for the year, an 85% increase over the $1.3 million he received in 2019. Chief Corporate Development Officer Albert Rosenthaler received a 45% increase in total compensation to $4.5 million from $2.6 million in the prior year, while Chief Legal Officer Renee Wilm’s total haul stayed constant at $2.9 million for the year.  

Liberty Media chairman John Malone’s total compensation dipped 22% to $1.09 million from $1.4 million in the prior year.  

Liberty Media CEO Greg Maffei was the latest media chief to speculate on Amazon’s reported increased interest in sports rights, telling an industry audience earlier this week that he expects streaming video companies to get more involved in sports, which should drive rights fees skyward.

Speaking at the virtual Deutsche Bank Media, Internet and Telecom conference on Monday, Maffei said the time is ripe for big tech to boost its involvement in streaming sports.

"Amazon is certainly looking pretty actively, it looks like, at the NFL. You’ve seen a lot of interest from various players,” Maffei said. “Have we seen the execution yet? No. Amazon has moved from a bit player in the NFL to being a serious player and I suspect they're only going to get more serious over time and they won't be the only ones."

Amazon first dipped its toes in sports programming in 2017, agreeing to pay about $50 million for 10 Thursday Night Football games broadcast by NBC and CBS. It stepped up that involvement in 2020, renewing its TNF for three years and opening up speculation that it could expand its sports involvement, to possibly include the entire TNF slate. Fox CEO Lachlan Murdoch has hinted that the programmer may concentrate on its NFL Sunday package and give up rights to TNF. Amazon had been considered to be a possible bidder for the NFL’s out-of-market Sunday Ticket package, a notion that has gained more steam after AT&T agreed to spin off its TV distribution unit -- including DirecTV, U-verse and AT&T TV Now -- and selling a 30% interest in the new unit to TPG Capital for about $8 billion. As part of that deal, AT&T said Sunday Ticket, to which it holds the rights through the 2022 season, would move to the new company. 

Sunday Ticket negotiations are expected to wait until next year, as the league and potential suitors continue to circle around other rights. According to Sports Business Journal, Disney’s ESPN hammered out a deal to renew Monday Night Football and its ABC broadcast network will return to the Super Bowl rotation for the first time since 2006. 

On March 10, Disney said ESPN had reached a seven-year deal with the National Hockey League to air games on the cable channel as well as its ABC network and Hulu streaming service. 

But Amazon finally stepping up to the sports plate could have a huge effect on the way fans consume sports content.

"Amazon Prime taking over Thursday Night Football is a watershed moment in TV history that will undoubtedly accelerate the demise of linear TV and the multichannel bundle,” LightShed Partners partner and media and technology analyst Rich Greenfield wrote in a recent blog posting. 

In a research note, Barclays analyst Kannan Venkateshwar cited published reports that speculate Amazon would pay about $1 billion annually for TNF rights, above the $780 million he estimated Fox is paying in the last year of its five-year deal.

Thursday Night Football ratings have been significantly lower than other NFL packages, Venkateshwar wrote. According to the analyst, Amazon streamed the 11 games Fox carried in the 2020 NFL regular season and one Saturday game. The Saturday game generated about one-third of the viewership of an average nationally televised NFL game, and streaming TNF added between 200,000 and 500,000 viewers, according to the Barclays analayst. However, he noted the new deal may be for more games, driving down the cost per contest.  

And ratings may not be the ultimate game for Amazon when it comes to sports or anything else involved with Amazon Prime. 

Back in December, Amazon’s VP of global sports video Marie Donoghue said the online retailer’s interest in sports is tied specifically to what benefit it would have for the Amazon Prime service.

“We are opportunistic,” Donoghue said at the SportsPro OTT Summit in December. “I think sometimes that confuses people, that we do look at everything, but everything has started with the customer and we only do it if it provides value to the customer and particularly their Prime membership.” 

Later in that interview, Donoghue, who spent about 20 years at ESPN expanding its programming offerings before joining Amazon in 2018, stressed that Amazon isn’t a 24-hour sports service, but an entertainment service, and its inherent nature is vastly different from the other types of companies that normally bid on sports rights. 

“We literally start with the customer and work backwards,” she said

Amazon Prime offers free shipping to customers and has about 150 million people worldwide paying about $119 per year for the privilege. So while it would be nice if sports on Amazon Prime Video drew in more subscribers, the value of that add-on to the service is not in drawing in more customers who watch games and leave. The purpose of the video offering, Amazon chairman and CEO Jeff Bezos said back in 2016, ultimately lies in how many consumer products those viewers buy. 

“From a business POV for us, we get to monetize that content in an unusual way," Bezos said at the ReCode Code Conference in 2016. "When we win a Golden Globe, it helps us sell more shoes in a very direct way." 

The entrance of big video streamers into sports rights negotiations has been expected for years, but so far their involvement has been minimal. Any involvement from those companies -- Facebook and Google have been cited as potential major rights bidders -- would bode well for Liberty, which owns Major League Baseball’s Atlanta Braves, and the Formula One racing circuit. At the same time, the traditional cable bundle is showing signs of unraveling -- MVPDs lost about 7 million customers in 2020, according to reports -- and regional sports networks have been under pressure because of their high affiliate fees. 

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"The most important thing that drives sports rights is competition. To the degree we see new large digital distributors and the like enter the markets, that's a positive," Maffei said. “To the degree we have seen tradeoffs between free-to- air and pay and then a new version of pay, digital, I think having new players, new entrants is probably the most positive effect we have. I do see that likely to happen for some of the sporting events in the countries we have.”

Maffei also said that for smaller sports, breaking into the standalone streaming business can be tricky. Liberty’s own Formula One launched F1 TV in 2018, and earlier this week said it would revamp the streaming service with new features allowing fans to more easily find archived content and adding Brazil, Slovakia and the Czech Republic to the more than 82 countries where the service is available. 

At the Deutsche Bank conference, Maffei said that in the future he sees sports rights holders, especially smaller ones, offering a hybrid of subscription, broadcast and pay TV content. 

“We’ve learned that that can be an unbelievably  powerful fan engagement tool,” Maffei said of F1 TV. “But it’s hard at the amount of content we have -- 23 races and even shoulder content -- to build enough content to probably build a compelling service for a broad, board group of people. To be a fan engagement tool, great, to be something that is amazing for a really dedicated hardcore fan group, perhaps. But to be something which substitutes or overruns our traditional partners or the large pay partners or the large digital partners, I think that is going to be harder to see. I think you’re going to see a lot of sports find difficulty in building -- and we don’t have enough content --  a broad enough content interest on an ongoing basis to build a subscription product that really replaces what they have. Look at what happened to WWE pulling back and going to Peacock. And they have a lot more content than we do.”

Liberty Broadband, the tracking stock created by cable legend John Malone’s Liberty Media to mirror its investment in Charter Communications, will begin selling back some of that interest to the cable company, part of an earlier agreement to cap its holdings to 26%, and could use some of the gains for share repurchases, to pay down its own debt or for acquisitions, according to one analyst.

Liberty Broadband was created in 2014, about one year after Liberty Media acquired a 27% interest in Charter for about $95 per share. Charter stock is now trading above $600 per share.

Liberty Broadband’s holdings in Charter have fluctuated as it has bought stock and the cable operator has repurchased its shares over the years. Last year Liberty Broadband said it had a 24.4% stake in Charter. As of Nov. 20, Liberty Broadband said it owned about 51.1 million Charter shares.    

According to a Securities and Exchange Commission filing on Feb. 24, Liberty Broadband and Charter agreed back in 2015 that the former’s interest would not exceed 26%. However, as a result of Charter’s own share repurchase programs, that interest is rising, and Liberty Broadband has agreed to sell Charter shares back to the company on a monthly basis to keep that interest at a constant 26%. Analysts expect Charter to buy back about $10 billion of its own stock in 2021, after repurchasing about $12.1 billion in stock in 2020. But that 2021 estimate could rise as the company did not participate in the federal C-Band wireless auctions, which would free up more capital for buybacks. 

According to the SEC filing, under the agreement, Liberty will sell to Charter, generally on a monthly basis, a number of shares of Charter’s Class A Common stock representing an amount sufficient for LBB’s ownership of Charter to be reduced such that it does not exceed the ownership cap then applicable to LBB under the Stockholders Agreement as Charter reduces outstanding shares through repurchases from time to time.  

In a research note, Evercore ISI Group analyst James Ratcliffe estimated that Liberty Broadband could sell as much as $2.7 billion worth of stock this year back to Charter as part of that agreement. After taxes, the tracker could stand to gain as much as $2.3 billion from the sales.

Ratcliffe wrote in the note to clients that the most likely scenario is that Liberty Broadband will use the proceeds to repurchase its own shares. Second on the list could be M&A, and lastly, it could be used to pay down debt.

In his note, Ratcliffe wrote that if Liberty Broadband went the M&A route, he would "expect any transactions to be in the cable space. We view this as more likely than paying down debt, but less likely than buybacks."  

Liberty Broadband is no stranger to cable deals. In 2017, sister company Liberty Interactive purchased GCI in a deal that valued the Alaskan telecom company at about $1.1 billion  and forming GCI Liberty. After a series of complicated deals, GCI Liberty merged with Liberty Broadband in August.   Liberty Broadband also owns 100% of WiFi mobile positioning and location company Skyhook, which was purchased by Liberty Broadband subsidiary TruePosition in 2014.  In 2016, TruePosition and Skyhook merged under the Skyhook name.  

Liberty Broadband has been a favorite of some analysts who see the shares as a way to own Charter stock more cheaply. Liberty Broadband was priced at $144.25 each in early trading on Feb. 25, while Charter was priced at $616.95 per share.   

While the most recent stock repurchase shouldn’t come as a surprise, Ratcliffe wondered why the parties just didn’t raise the cap on the amount of Charter stock Liberty Broadband can own.    

“We wonder, however, what drove the decision to set up a periodic sale structure, rather than raising the ownership cap,” Ratcliffe wrote. “In particular, was this decision driven from the Charter side (a desire to limit Liberty’s ownership, for governance or tax reasons), or from the Liberty side (a desire to begin to monetize the Charter investment without selling to the public market)? Clearly, this will be a question when Liberty reports earnings tomorrow.”      

Liberty Broadband is scheduled to hold a conference call with analysts to discuss Q4 results on Feb. 26 at 11:15 a.m.

Liberty Media CEO Greg Maffei’s total compensation more than doubled in 2019 to $44 million, fueled mainly by a new employment deal he signed in December.

Maffei’s annual haul was more than twice the $20.2 million he received in 2018. In December, he renewed his employment deal, ensuring he would remain CEO through 2024. As part of that agreement, Maffei received a one-time bonus of $2.2 million and option awards of $27.8 million, nearly $20 million more than the $8.8 million in options he received in the prior year.

Maffei’s annual salary rose slightly to $1.17 million from $1.1 million in the prior year, and his stock awards increased to $3.6 million from $3 million in 2018.

Liberty Media operates and owns interests in a range of media businesses, mainly attributed to three tracking stock groups — Liberty Sirius XM Group, the Braves Group and the Formula One Group. It also holds interests in Live Nation Entertainment and a minority stake in AT&T.

Liberty Media chairman John Malone said his company’s failed attempt to purchase the 21 Fox regional sports networks put up for sale earlier this year by the Walt Disney Co., would have helped to right what he sees as one of cable’s biggest mistakes -- allowing content providers to force distributors to carry programming bundles that are too large and too pricey.

Liberty was one of several bidders for the Fox RSNs, which were eventually won by Sinclair Broadcast Group and a minority partner -- Byron Allen’s Entertainment Studios -- for about $9.6 billion.  Liberty had reportedly teamed up with Major League Baseball in its bid, but backed off when the price became too high.

At Liberty’s Investor Day in New York Thursday, Malone confirmed that Liberty teamed with MLB on a bid, which he said would have been “affordable, and less disruptive.”

Related: RSN Redux 

“It was designed essentially to be a little more rational, and not to allow retransmission consent to be confounded with regional sports,” Malone said. “The unfairness of that leverage would just make the overpricing of the big bundle that much worse.”

Malone continued that he saw the cable industry’s allowing networks to make carrying all of their networks across the board as a contractual obligation, as a mistake.

“That really turned the negotiation into a tax,” Malone said. “Once there was competition among distributors and a fear that distributors would lose market share if they didn’t carry pretty much everything in the sports area, it really just turned sports programming into a tax.”

He added that in addition to enriching players and distributors, that practice also drove the price of the big bundle beyond the economic limits of many households.

“If you didn’t have that component in the cost of content, you would probably see far fewer cord cutting for economic reasons,” Malone said.

While Dish Network managed to report a solid Q3 even after dropping the Fox RSNs in July, Malone said satellite’s economics are different, because in many markets it is the only viable video alternative. For other distributors with three or even four competitors, it would be tougher to survive without the channels.

Late Sen. John McCain (R-Ariz) had proposed a solution about a dozen years ago, where any network that was priced wholesale over a certain threshold, would be made available a la carte by the distributor.

“The industry had a chance to support that and did not,” Malone said. “It was a huge mistake.”

Liberty Media chairman John Malone believes that consolidation, which has swept through the traditional cable distribution business largely at his own hand, will come to streaming video as well, and that could be good news for traditional pay TV companies.

Malone, speaking at Liberty’s annual Investor Day in New York, said that first the streaming business will likely experience a period of “hyper-competition” as more and more content owners crowd in to the space.

Already several content owners have debuted direct-to-consumer services -- Disney’s Disney+ offering was launched on Nov. 12 and had 10 million people sign up for the service during its first days, while Apple TV+ launched on Nov. 1 to considerably less hype. AT&T plans to begin offering HBO Max in May in addition to an IP-based streaming service -- AT&T TV -- later in the year.

“In the short run you’re going to see hyper-competition as content owners try to get into the scripted streaming global market space,” Malone said during a Q&A session at the Liberty Investor Day. “I think a lot of investment is going to go in to trying to capture leadership market share in that space. Eventually there’ll be consolidation in that space because it probably won’t support as many competitors as currently think it represents a good opportunity. Some will become niche players, some will become more national players less global players. Quite a few will survive and be able to watch as less competition turns down the heat under the cost of creation of new content.”

Malone said the business already is going through “some skirmishes and maybe some promo wars that will settle down over time.”

The big bundle, a staple of the early cable business, will likely continue to lose popularity. But he said, that could open up other opportunities for cable operators.

“The big bundle -- that number is probably going to shrink slowly in terms of big bundle customers, but probably grow in terms of the app customers,” Malone said, adding that cable distributors could eventually sell packages of OTT services to customers, similar to what it does for Netflix, Hulu and Amazon Prime apps that customers access via set-top boxes.

Malone pointed to Charter Communications -- in which Liberty owns a stake -- as one cable operator that could benefit from this change.

“We saw this play before when multichannel content providers all wanted to be carried and ended up being bundled together and became a video package,” Malone said. “That all happened in the 1980s. That is likely to happen, perhaps with a couple of the big global guys, but in particular with national or regional or specialty or niche providers. I don’t think, in terms of entertainment, that one size fits all.”

The auction for 21 former Fox regional sports networks is nearing the finish line, with reports claiming that Sinclair Broadcast Group has emerged as the winner with a bid around $10 billion.

According to Fox Business reporter Charlie Gasparino, Sinclair and The Walt Disney Co., which closed on its purchase of the RSNs and other programming assets from 21st Century Fox last month, have a “handshake agreement” for the networks for a price up to $10 billion. No formal agreement has been signed, and there is still a possibility that a deal may not be finalized.

[embed]https://twitter.com/CGasparino/status/1121793264628060161[/embed]

Disney agreed to divest the RSNs as part of federal approval of the larger Fox deal. As part of those conditions, Disney said it would have a deal in place within 90 days after it closed the Fox purchase. That closing occurred on March 20.

Sinclair was one of the original bidders for the RSNs, and apparently fought back competing offers from John Malone’s Liberty Media and Big3 Networks, a professional three-on-three basketball league headed by rapper Ice Cube. 

Malone and Liberty Media reportedly joined forces with Major League Baseball in its bid for the RSNs, but according to at least one person familiar with the auction process, its offer just became too complicated.

“There were a lot of moving parts there,” said one person familiar with the auction process.

Sinclair, which controls 191 television stations in 89 markets across the country, is serious about sports. It purchased the Tennis Channel in 2015 for $350 million and has said publicly that the Fox RSNs would be “a good fit.”

Earlier this year, Sinclair paired up with the Chicago Cubs MLB team for a new sports channel -- Marquee Sports Network-- that will be the exclusive home of Cubs games beginning in the 2020 season. Sinclair also was one of the partners that helped the New York Yankees buy back Fox’s 80% interest in RSN the YES Network for about $3.5 billion. That deal, which sources say is basically complete, hasn’t been officially announced yet.

The Walt Disney Co.’s months-long effort to sell 22 regional sports networks might be getting close to wrapping up, now that Disney’s deadline clock has formally begun.

Disney said it would sell the RSNs as a condition to winning federal approval of its $71.3 billion purchase of 21st Century Fox programming and production assets. As part of that agreement, Disney agreed to have sale agreements in place within 90 days after closing the larger Fox deal, which occurred on March 20.

According to people familiar with the auction process, the next round of bids — most likely the final round, given the 90-day window — is due in mid-April. At press time, the leaders appeared to be a team owners’ group, including John Malone’s Liberty Media; and Major League Baseball itself.

Whether or not that means a winning bid will be picked in April still remains to be seen. The 90-day deadline to close the sale would mean a deal would have to be done by June 18. But those same people familiar with the auction said that as long as progress is being made, an extension could be applied for, which would push the deadline to Sept. 16.

Bidders Have Had Time to Ponder

Disney began this process in June 2018, after the Justice Department approved the Fox transaction. Books on the networks went out in October.

One deal is done or at least is in the eighth inning, metaphorically: YES Network’s sale to the New York Yankees. The Yankees, which own 20% of the channel and had the right of first refusal to purchase Fox’s 80% interest in the event of a sale, exercised that right earlier this month, teaming up with Amazon, Sinclair Broadcast Group and several private-equity firms to buy it for an estimated $3.5 billion, less than the $4 billion most expected the network to fetch. When the deal closes, the Yankees will own the majority of the channel.

While the YES deal hasn’t been officially announced, most observers believe that is merely a formality as the network is waiting until the other RSNs are closer to a sale before making the big reveal.

Sinclair, which in February announced a partnership with the Chicago Cubs for an RSN called Marquee Sports that will launch in 2020, is apparently still interested in adding to that portfolio. During an earnings conference call on Feb. 27, Sinclair CEO Christopher Ripley alluded to reports concerning opportunities that Sinclair may have in the space.

RELATED STORY: Fox Closes Disney Deal, Issues Affiliate-Fee Warning

“I can’t comment specifically on those reports, due to non-disclosure agreements we’ve signed,” Ripley said. “But there is a very unique moment in time here in the RSN space that we really like our positioning on.”

There have been a steady stream of potential suitors for the remaining RSN assets. Private-equity firms like Apollo Global Asset Management; consortiums of teams and investors; rapper Ice Cube, and others have all expressed interest.

According to Fox Business Network’s Charlie Gasparino, Disney and MLB were discussing “add-ons” to the league’s bid, mainly a “national rights extension” that would allow the league to air some games on ESPN that the RSNs own the rights to.

Gasparino said those discussions seemed to hint that MLB was in the lead.

One source familiar with Big 3 Networks, the professional three-on-three basketball league owned in part by Ice Cube, said it remains very much in the hunt for the channels. Big 3 has secured partial backing from boutique PR firm Centerbridge Partners.

Malone was said to be interested mainly to protect the interests of the team Liberty owns, the Atlanta Braves. There was a fear among owners of smaller market teams that an outside buyer would allocate more resources to networks with teams in larger cities, leaving the smaller markets in the lurch.

Other team owners have reportedly entered the fray as well. Platinum Equity chief Tom Gores, who also owns the National Basketball Association’s Detroit Pistons, has conferred with Malone about a bid, as has Minnesota Twins owner Jim Pohlad. Other baseball teams including the Arizona Diamondbacks, the Los Angeles Angels (owner Arte Moreno was reportedly interested in bidding on Fox Sports West, Prime Ticket, Fox Sports Arizona and Fox Sports San Diego) and the Milwaukee Brewers have also considered making bids, according to reports.

Bids Seem to Be Coming In Low

Unfortunately for Disney, the networks, including Fox Sports channels in Atlanta, Detroit, Kansas City and Phoenix, have reportedly attracted bids in the $10 billion range, or about half of the $20 billion first expected.

The emergence of Malone was said to have raised the price slightly — to maybe as high as $13 billion — but still below the original target.

Live sports and news are primarily the two remaining areas of programming that are attracting meaningful ad dollars. And sports on RSNs consistently place high in the ratings.

But regional sports networks have distribution concerns. Already saddled with a reputation of being too costly — YES Network, according to Kagan, a unit of S&P Global Market Intelligence, costs distributors about $6.50 per subscriber per month — they have been placed on tiers by most cable and satellite service providers, which limits their audience.

“With the 90-day clock beginning with the close of the Disney/21st Century Fox sale, and YES not getting its full estimated value, I don’t think the other RSNs will be able to either,” Kagan sports analyst Adam Gajo said in an email message.

ATLANTA -- Bill Warga, vice president, Technology for Liberty Global, and Tom Adams, executive vice president, Field Operations for Charter Communications, will co-chair the program committee for SCTE•ISBE Cable-Tec Expo 2019 in New Orleans.

The news broke during day one of the Cable-Tec Expo 2018 in Atlanta. Warga and Adams were re-elected as chair and vice-chair, respectively, of the SCTE•ISBE board of directors here.

Now the cable industry’s largest annual convention, the Expo -- which will mark its 50th edition next year -- is slated to be hosted in Denver and Atlanta multiple times between next year and 2019, with one-time stops in Philadelphia and Washington, D.C.

“In our role as the industry’s applied science arm, SCTE•ISBE is looked to for engineering expertise and workforce development that can move the needle in deployments,” Mark Dzuban, president and CEO of the Society of Cable Telecommunications Engineers and the International Society of Broadband Experts, said in a statement. “Bill Warga’s background as immediate past chair of our Engineering Committee and Tom Adams’ keen understanding of the connection between workforce education and operational excellence ensure that Cable-Tec Expo 2019 will address those areas in ways that can have material impact on operators’ bottom lines.”

“The innovative spirit of our vendor community and the desire of operators to drive new customer experiences continue to fuel the success of cable telecommunications,” Warga said in the release. “Tom and I will be working together with the SCTE•ISBE Cable-Tec Expo 2019 Program Committee and our partners at NCTA and CableLabs to harness that energy and build an event that creates real value for our industry.”

“Ensuring that the workforce has the knowledge and the resources needed to convert new technologies into great customer experiences is key to cable’s future success,” Adams said. “I look forward to working with Bill and the 2019 Program Committee to continue the enhancement of SCTE•ISBE Cable-Tec Expo’s role in the industry’s educational and operational ecosystem.”

Qurate Retail CEO Gregg Maffei received $47.8 million in total compensation in 2017, more than three times the $13.3 million payday he got in the prior year, mainly in the form of option awards from the newly minted company, a combination of former Liberty Interactive Group holdings QVC, HSN Inc. and several other online retail brands.

Maffei received his 2017 compensation as president and CEO of Liberty Interactive. With the name change to Qurate Retail Group – effective in March – Maffei is now chair of the new company, while QVC CEO Mike George was named CEO of Qurate. George received total compensation of $7.7 million in 2017 as QVC CEO, 42% higher than the $5.4 million he received in 2016.

Maffei received $1.06 million in base salary in 2017, about the same as the year before. But his biggest windfall was in the form of option awards -- $41.8 million in 2017, more than five times the $8.1 million he received in the prior year. Maffei also received $2.3 million in stock awards – up from $1.96 million in the prior year, and non-equity incentive plan compensation of $2.5 million, up from $2 million in 2016.

Related: Ergen Sees Pay Rise in 2017

Other executives received about the same amount of compensation in 2017 as they did in the previous year. Chief legal officer Richard Baer took a pay cut – he received total compensation of $3.2 million in 2017, down from $5.1 million in 2016 – but others stayed fairly even. Chief financial officer Mark Carleton received $1.9 million in total compensation in 2017, even with the $1.9 million he netted in 2016; and chief corporate development officer Albert Rosenthaler received $2.7 million in total comp in 2017, slightly higher than the $2.4 million he received in the prior year.

For the first time, the lights of Broadway will shine on The Cable Center’s newest Cable Hall of Fame class.

Five executives and a groundbreaking television show — AMC’s drug-dealer drama Breaking Bad — will share the stage of New York’s Ziegfeld Ballroom on Wednesday, April 4, for the 2018 Cable Hall of Fame induction ceremony. Lending more star wattage to the festivities will be host Carla Hall, a popular cooking personality from ABC’s The Chew and Bravo’s Top Chef and Top Chef America.

Among the industry figures set to be enshrined are Nomi Bergman, president, Advance/Newhouse; John Bickham, president and chief operating officer, Charter Communications; Balan Nair, president and CEO, Liberty Latin America; Richard Plepler, chairman and CEO, HBO; and Neil Smit, vice chairman, Comcast Corp.

June Travis, a former NCTA executive, will also be presented with the group’s Bresnan Ethics in Business Award. Breaking Bad creator, head writer and executive producer Vince Gilligan will accept Hall of Fame honors on the AMC show’s behalf.

Nomi Bergman
President, Advance/Newhouse

Second-generation cable executive Nomi Bergman didn’t intend to get into the family business. After graduating from the University of Rochester with a degree in statistics and economics, Bergman went to work as a systems consultant in Arthur Andersen & Co.’s consulting division. Bergman’s father, Robert Miron, ran the Newhouse cable companies, and a cousin at parent company Advance/Newhouse encouraged her to join the larger organization’s internal consulting group. As an analyst with Advance/Newhouse, Bergman worked on instituting best practices and operating efficiencies among the company’s publications and cable divisions.

In the late 1980s, her group installed new accounting systems at company properties. Noticing that the various cable operations used a variety of billing systems, she recommended integrating them. She took charge of what would be a two-year project involving 50 system conversions. She became a cable nomad, setting up camp in each Newhouse location to oversee successive rollouts. The odyssey was an immersion in MSO field operations that convinced Bergman to make her professional home in cable at Advance/Newhouse. (The company formed a partnership with Time Warner Cable in 1995.)

Bergman adapted quickly to the architecture side of the cable business. Among her most satisfying achievements was being part of the launch of RoadRunner, Time Warner’s broadband internet service. “Being a part of reinventing the purpose of a cable system … re-architecting service delivery, growing the team, was beyond exciting,” she said.

Bergman helped launch sixth-ranked MSO Bright House Networks in 2003 and served as the company’s president from 2007-16. Today, as senior executive officer with Advance/Newhouse companies, she focuses on corporate development and strategic partnerships.

The busy executive and mother of three daughters has been a force in a number of cable and community support organizations, and she remains actively involved with several. Her work on the board of Adaptive Spirit grew out of a mother-daughter activity that became an annual tradition. “Watching [U.S. Paralympic Ski Team members] embrace their disabilities as their star qualities and become exceptional athletes is incredibly inspiring,” Bergman said. “It’s a powerful metaphor for us all — about how to live our lives and be our best selves.”

She believes in the value of kindness in all aspects of life. “People trust kind and caring leaders,” she said, and feels these qualities helped her to cultivate dedicated fearless, and knowledgeable teams who felt empowered to win.

John Bickham
President and Chief Operating Officer, Charter Communications

John Bickham’s career has taken him from the utility industry in Texas to the cable C-suite in Connecticut. Born in Corpus Christi, he graduated from Texas A&I — now part of the Texas A&M system — but had no idea where he would go from there. He landed at utility holding company Houston Industries, where he helped design and build coal-fired generating stations. In 13 years with the company, he was involved in utility regulation at the national and state levels. In the mid-1980s, the holding company became interested in cable and went into partnership with ATC. Bickham’s accidental entry into the cable business was the start of a long, successful career.

Compared to the staid world of utilities, Bickham found cable “an immature business, unsophisticated from a business planning and construction standpoint. It was different, it was fun, and you were a lot closer to the cash register.” Thirty years ago, “who knew the business was going to be what it is today? Today … we sell services that every home and business needs.” In 1986, he co-founded KBLCOM, a cable company that partnered with ATC and owned cable systems in eight states. He left as president and chief operating officer of KBLCOM to operate Time Warner Cable’s Los Angeles division, and advanced to executive vice president of TWC, overseeing the company’s operations in North Carolina, South Carolina and Texas.

Bickham moved to Cablevision Systems in 2004 as president of cable and communications. He joined Charter as COO in 2012 and added president to his title in 2016 when the company’s acquisition of Time Warner Cable and Bright House Networks closed. In the cable industry, local operations continue while the owners change; at Charter, Bickham has gotten reacquainted with cable systems that he previously led at KBLCOM.

The father of two grown daughters, Bickham enjoys spending time with his four-year-old grandson. And he travels the world in pursuit of game birds — to England, Spain and South America, as well as in the U.S.

Bickham advises the industry’s future leaders to take every opportunity to learn the different aspects of the business, especially as companies grow and jobs become more tightly focused. “Don’t limit yourself,” he urged. “Don’t ever get bored with what you’re doing. Move around in your company; experience different things.”

Breaking Bad
Television Drama Series, AMC, Vince Gilligan, creator

Only on cable could a series that starts with a cancer diagnosis and continues into the darkest corners of the methamphetamine industry find a home. Breaking Bad broke new ground in television drama and demonstrated the possibilities of innovative storytelling.

The series premiered on AMC in 2008 and ended in 2013. It tells the story of Walter White, a New Mexico chemistry teacher who, with two years left to live and a desire to secure his family’s financial security, becomes a powerful meth manufacturer.

Series creator Vince Gilligan envisioned an approach that had never been tried in series television: a “show about change” that began with a definite end point in view. Gilligan is a TV fan who streams shows from the 1950s and ‘60s and observed, “The thing TV has done very well is tell an indefinite story — a story that can go on for 20 years [a la Gunsmoke or NCIS]. And the way to do that, from a writer’s point of view, is not to put the characters through too many personal changes … I figured stasis had been tried with great success for 50 years, and something more dynamic in terms of character would be interesting. But that meant it couldn’t last indefinitely.” Gilligan was well aware that the concept of a finite series would be difficult to sell. “That’s why I’m still amazed that Sony and AMC signed on. … You don’t want to be told from the get-go, ‘This thing probably won’t last long enough for you to make your money back.’ ”

Not only does Walter White change, but unlike other TV heroes or anti-heroes, he changes for the worse, as the series title suggests. Legend has it that Gilligan pitched his idea to AMC as “turning Mr. Chips into Scarface.” Another unusual approach: in the moral universe of Breaking Bad, actions have consequences. Ultimately, characters reap what they sow, and nobody gets away with anything.

Gilligan believes television drama continues to change, and he hopes it will continue to pursue shows designed for more than the same demographic sweet spot. Above all, he wants writers to be bold. “Don’t copy off your neighbor’s exam,” he said. “Don’t pay too much attention to the stories other folks are telling; tell a story that excites you.”

Balan Nair
President and CEO, Liberty Latin America

“My life is 95% luck,” said Balan Nair. “Making the most of opportunities takes a little bit of skill, but to get those opportunities [takes luck]. I’m a very lucky man.” What Nair calls luck, others might see as destiny.

In his 11 years with Liberty Global, Nair has advocated focusing on software as the driver of cable’s evolution and he’s met the challenge of harmonizing products, services, workforce and networks across multiple countries, languages and regulatory environments. Named CEO of Liberty Latin America late last year, he is now focused on high-potential markets in Latin America and the Caribbean.

Nair grew up in Malaysia, coming to the U.S. in 1985 to study electrical engineering at Iowa State University. He met his wife at Iowa State — an event he believes was the greatest stroke of luck in a fortunate life. He began his career working on high-voltage power transmission, and discovered an aptitude for writing software. His wife worked at telephone company USWest in Iowa, and when she was transferred to Minneapolis, he followed and found work at a power research company. When another USWest transfer came up, this time to Denver, Nair switched from power to telco, and joined USWest himself. In more than 12 years with the company and its successor, Qwest Communications International, he rose up the leadership ladder to become chief information officer and chief technology officer.

With extensive telco experience under his belt, Nair decided to move on to the fast-growing internet world. He joined AOL as chief technology officer, overseeing technology, IT and network operations. The Nairs left Denver for AOL headquarters in Washington, D.C. Given his experience, Nair was well-positioned for an industry that saw its future in both areas. Liberty Global came calling in 2007, and the family happily returned to Denver.

As a cable industry newcomer, Nair saw a huge opportunity. He “immediately saw the advantage cable had over any other telecommunications business. We had better networks, better platforms and we were better suited for the transition to a software world. We also have a perpetual entrepreneurial spirit. The founding members [of the industry] are still involved, and our second-generation managers were trained by founders. That is very special.”

Richard Plepler
Chairman and CEO, HBO

It’s safe to assume that Richard Plepler is the only high-ranking cable executive whose entry into the industry came about through a chance meeting with a U.N. ambassador at a Chinese restaurant. To start at the beginning: Plepler grew up in the ’60s in a politically active home where engaged, informed citizenship was paramount. “At the dinner table, you had to have read The Wall Street Journal and The New York Times, and you had to be prepared to talk about the world,” he recalled.

After graduating from Franklin & Marshall College, he went to work for Sen. Chris Dodd (D-Conn.). From Dodd, he learned about building consensus and the notion that people can disagree without being disagreeable. “I think that informed the way I began to think about business, and I think it informs my leadership style,” Plepler said.

Plepler next went on to work for a small media-consulting firm that specialized in crisis management. After a year, brimming with confidence at 26, he started his own strategy and production firm, RLP International, which would make films to help countries that wanted to improve their images. Cheerfully acknowledging his own youthful hubris, Plepler is quick to point out that he was RLP International’s sole employee.

His big break came at a Chinese restaurant in New York in 1988, where then-Israeli ambassador to the U.N. Benjamin Netanyahu happened to be dining. “I went over to introduce myself, and I said, ‘You have a huge problem in the U.S.’ The first intifada had broken out, and Israel was being viewed negatively. I told Netanyahu, ‘This needs to be put in a larger context, sir, and my company, RLP International, knows how to do that.’ And by some miracle, he said, ‘Come see me.’ ” The result of their subsequent meeting was a well-received documentary for PBS that explained the complexity of Israel’s situation. A call from HBO’s Michael Fuchs soon followed, inviting Plepler to join the network in 1992 as communications chief.

“From my first day [at HBO], I always felt like I was where I belonged,” Plepler said. “The people I’ve observed who have done the best feel they’re in the environment where they’re meant to be. Be in the place where you feel passionate about the work, about the mission.”

Neil Smit
Vice Chairman, Comcast Corp.

Growing up on a farm in Connecticut, Neil Smit didn’t have a clear idea of what he wanted to be when he grew up, but he knew what he didn’t want to do. Farming was at the top of that list; construction was second. “My father was in construction, and I didn’t necessarily want to be the second generation in the construction business,” he said. “I wanted to carve my own path.” He entertained notions of becoming an astronaut, but after graduating from Duke University, he ended up on sea, air and land as a member of the legendary Navy SEALs.

From his five-and-a-half years as a SEAL, Smit learned important lessons that he applied to his subsequent business career. “The first thing you learn in SEAL teams is, it’s all about teams,” he said. “If you’re not pulling together, you’re pulling apart, and you do everything together as a team. The other thing is that you communicate very directly from day one. And finally, you’re always developing your skills, your people, and you have to keep building new capabilities. More than anything, it’s about the teamwork.”

When Smit retired from the Navy as a lieutenant commander, he worked in hostage negotiations before moving into the corporate world. He held leadership roles at Nabisco and Pillsbury, and then moved to AOL and MapQuest. Along the way, he got to know Paul Allen, who invited him to join Charter Communications as CEO in 2005. Cable appealed to him. “The day-to-day diversity of things that we had to deal with was interesting,” he recalled. “We were in the internet business, the phone business, the video business, and it was an ever-changing environment.” Another plus: “The quality of the people was very high; there’s still an entrepreneurial spirit in the industry,” he said.

Smit joined Comcast Cable as president and CEO in 2010. He now serves as a vice chairman of Comcast Corp., working to develop future technology- oriented business opportunities. Active in his community, he recently left the board of trustees of Philadelphia Children’s Hospital, and continues his work with the board of visitors for the Nicholas School of the Environment at Duke University. And his adventurous spirit remains strong. He enjoys boating, water sports and skiing, and recently took up ice driving with his son in northern Canada. “I’ll try about anything,” he said.

Bresnan Award Recipient

June E. Travis

June Travis retired from the cable television industry in late 1999. Since 1994, she had served as executive vice president and chief operating officer of the National Cable Television Association, the industry’s principal trade association based in Washington, D.C.

Prior to joining the NCTA, Travis was president and chief operating officer of Rifkin & Associates, a Denver-based cable television operator. Before that, she served in several executive positions at American Television and Communications, the predecessor to Time Warner Cable.

Recalling the days when cable was a much smaller business, Travis said the industry’s ethical core was apparent in the relationships between its leaders. The early entrepreneurs “were very competitive with one another, but if attacked from the outside, they circled the wagons and supported one another. The collegiality was palpable.”

Starting her cable career as a secretary, Travis noted the admirable leadership qualities she saw practiced by industry role models. “I kept thinking, ‘Gee, if I ever get into management, that’s how I would like to manage, that’s how I would like to be involved in the community, that’s how I would like to give back.’ ”

Travis has served as an officer and board member of a number of cable television industry boards, including CommScope, NCTA (now NCTA: The Internet & Television Association), C-SPAN, Cable in the Classroom, TeleCorps and Women in Cable (now Women in Cable Telecommunications). She chaired the industry’s political action committee, CablePAC, for nine years. She said such organizations made a tremendous difference to the industry’s employees.

She has been active in a number of Colorado organizations including the Greater Denver Chamber of Commerce Board of Directors, the Colorado Forum, the Colorado Women’s Forum, the National Jewish Center, Inter-Faith Community Services, Young Americans Center for Financial Education and the Dumb Friends League. She recently stepped down as chairman of the board of the Daniels Fund but remains on that board and also serves as a trustee for the Denver Center for the Performing Arts.

Travis believes in business leaders’ responsibility to their communities. “It’s huge,” she said. “And it pays back a hundred-fold. If you are genuinely in the community, not for the recognition, but truly caring, and participating, and supporting the community, you can’t buy that kind of customer respect.”

New York – Liberty Media chair and cable legend John Malone stood before a rapt, standing room-only audience at his company’s annual investors meeting here Thursday, telling analysts and investors that politics appears to be clouding what once was expected to be a more streamlined merger approval process.

Malone didn’t mention AT&T-Time Warner by name, but the chances of that merger passing regulatory muster have been under a cloud in recent weeks, as reports have said the government could move to block the deal if certain assets like CNN aren’t divested.

Related: Missed Connection for AT&T-Time Warner?

“I personally have very little insight into what the Antitrust Division is smoking these days,” Malone joked at the investor meeting. “Normally, verticals [mergers] have always been regarded as pretty straightforward, low-risk. To the degree politics gets into it, it becomes difficult to predict.”

Malone said that he hasn’t experienced much push back from regulators in his own business, although he added that the approval process for Discovery Communications’ (of which Liberty is a major shareholder) purchase of Scripps Networks Interactive has taken longer than expected.

“It has been a little bit delayed, more than I would have guessed,” he said.

Read More: Complete Coverage of the Discovery-Scripps Deal

But Malone still believes that smaller content companies, so-called “free radicals,” will be able to combine with little resistance from the government. But he said the current regulatory environment could be spurred by Justice Department officials wanting to rectify perceived misses in the 2011 approval of Comcast-NBC Universal. Comcast agreed to about 150 conditions for that deal, most of which expire in the middle of next year.

But those conditions were largely behavioral, centering on ensuring that Comcast did not favor its own networks more than others in terms of carriage and that it made those network available to all distributors.

“We have a new Antitrust Division, the FCC has gone more flexible, more capitalistic,” Malone said, adding that he wasn’t sure what the department’s concerns may be. “The only noise I picked up is that the professionals at Justice were not happy with the behavioral agreements they reached with Comcast on the NBC Universal deal. So they’re kind of rethinking behavioral versus structural change.”

But he added when Charter, another big Liberty holding, purchased Time Warner Cable last year, the cable operator agreed to “a number of rigorous agreements, some of which the government has voluntarily backed away from.”

Malone said the content business, both on the linear and social media side, appears to be more politically sensitive now than ever.

Liberty Media CEO Greg Maffei put the situation more bluntly, adding that consolidation in the content business is happening because of obvious pressures on the model.

“In my judgment, the traditional linear content business is severely challenged,” Maffei said. “I get the idea that there should be limitations on ensuring Starz [another Liberty holding] for example,  should get carriage on DirecTV. But the content business has gone from 200 original shows five years ago, 450 this year, the cost per hour at least doubled. We’ve seen a 5x increase in content. These guys can’t pay for it, we’re not going to pay for it at Charter, I suspect. Guys like Netflix have an amazingly advantaged model compared to the traditional guys. …The traditional content business is really challenged. The idea that you’re going to block consolidation here is crazy.”

Malone also touched on the wireless business, adding that despite his continued belief that a cable company will eventually acquire or be acquired by a wireless company, Charter’s decision to offer a wireless product through an MVNO with Verizon was the right move.

Malone added that MVNO’s effectively create “more competition instead of less,” and is probably the best way to get into the wireless space.

Malone said he isn’t particularly in love with the wireless business, but over time it becomes an important part of the connectivity picture.

European cable operator Liberty Global already has a strong wireless component and Malone said the synergies are “ultimately enormous.”

Malone was particularly high on Charter’s prospects, adding that cable’s two-way capabilities and broadband business will win the day.

“When you stick stuff out there and don’t have some kind of two-way path with the consumer, how do you know who’s watching, who’s paying?” Malone said. “…The reason got we out of the satellite business when we did was because it’s a one-trick pony – video only, very high ARPU and no return path. It was clearly going to come under assault.”

But Malone added practically every new communications technology, voice, video, internet search, 5G wireless, will need some kind of robust terrestrial network to make the final connections.

“The wind is at our back,” Malone said. “And all this noise about everybody wants to buy Charter, everybody wants to have some deal with Charter, well it’s actually true. It’s a fabulous company. It’s going to go in a great direction.”

Liberty Media said it has completed its $4.4 billion purchase of Formula 1, officially installing former 21st Century Fox vice chairman Chase Carey as chairman and CEO and racing legend Bernie Ecclestone as chairman emeritus. 

“We are delighted to have completed the acquisition of F1 and that Chase will lead this business as CEO,” Liberty Media CEO Greg Maffei said in a statement. “There is an enormous opportunity to grow the sport, and we have every confidence that Chase, with his abilities and experience, is the right person to achieve this. I’d like to thank Bernie Ecclestone, who becomes Chairman Emeritus, for his tremendous success in building this remarkable global sport.”

Liberty first announced the agreement to buy Formula 1 in September. The company received approval from Fédération Internationale de l'Automobile (“FIA”), the governing body of the motor racing icon, earlier this month, the last regulatory hurdle in completing the deal. 

“I am excited to be taking on the additional role of CEO. F1 has huge potential with multiple untapped opportunities,” Carey said in a statement. “I have enjoyed hearing from the fans, teams, FIA, promoters and sponsors on their ideas and hopes for the sport. We will work with all of these partners to enhance the racing experience and add new dimensions to the sport and we look forward to sharing these plans overtime.”

“I would like to recognise and thank Bernie for his leadership over the decades," Carey continued. "The sport is what it is today because of him and the talented team of executives he has led, and he will always be part of the F1 family. Bernie’s role as Chairman Emeritus befits his tremendous contribution to the sport and I am grateful for his continued insight and guidance as we build F1 for long-term success and the enjoyment of all those involved.”

Liberty Media plans to rename itself the Formula One Group and will change its ticker symbol on the NASDAQ Exchange from LMC to FWON, soon after the group name change has become effective, expected later this week. F1 will remain based in London and Maffei will be Deputy Chair of the board of F1. 

“I’m proud of the business that I built over the last 40 years and all that I have achieved with Formula 1, and would like to thank all of the promoters, teams, sponsors and television companies that I have worked with,” Ecclestone said in a statement. “I’m very pleased that the business has been acquired by Liberty and that it intends to invest in the future of F1. I am sure that Chase will execute his role in a way that will benefit the sport.”

A day after securing the final regulatory approval for its $4.4 billion purchase of Formula 1, Liberty Media said it will issue $400 million in senior notes in a private offering to increase the cash portion of the deal.

Liberty received approval from the Fédération Internationale de l'Automobile (“FIA”), the governing body of Formula 1 racing, on Jan. 18, the last regulatory hurdle for the deal.  Liberty, which first announced the purchase in September, has said it plans to close the deal by the end of the month.

The cash convertible senior notes will be used to increase the cash portion of the deal to the selling shareholders by $400 million and retain in treasury the 19 million shares that would otherwise have been issuable to the selling shareholders based on the per share purchase price of $21.26. These Liberty Media shares will be reserved by Liberty for issuance to the F1 teams at a per share purchase price of $21.26.

“We think it’s important to offer the teams the chance to invest in F1 and further align our interests,” Liberty Media CEO Greg Maffei said in a statement. “We look forward to working with the teams to increase the appeal of this iconic sport and enhance the F1 business.”

Liberty has said one of its goals is to strengthen the teams that make up Formula 1, which have let Liberty know of their interest.

 “Several of the teams have expressed interest in investing and we have already begun productive discussions to make the sport more competitive and even more exciting,” Formula 1 chairman Chase Carey said in a statement.

The aggregate number of Liberty Media shares to be issued at the F1 closing will not change as a result of this transaction. Only the allocation of the 138 million shares will change as follows: approximately 57 million to the Selling Shareholders, 62 million to the third party investors and 19 million into treasury.

To the extent such shares are not issued to the F1 teams within six months following the closing of the acquisition, the shares will be retired. If the acquisition of F1 is not completed, Liberty will use the net proceeds from this offering for general corporate purposes, which may include capital expenditures, acquisitions, working capital, repayment of debt and repurchases of common stock. Pending the completion of the F1 acquisition or other such uses, Liberty intends to invest the net proceeds in cash equivalents or short-term investments.

The notes, as well as the associated cash proceeds, will be attributed to the Liberty Media Group. Pro forma for this financing and the closing of the F1 acquisition, total debt attributed to the Liberty Media Group will include the proposed cash convertible senior notes, $1 billion 1.375% convertible notes due 2023, $445 million Time Warner Inc. exchangeable debentures due 2046, $350 million drawn under a Live Nation margin loan, $36 million of other corporate level debt as of Sept. 30, 2016 and approximately $4.1 billion of existing F1 debt as of July 31, 2016.

Liberty Media said it has received approval  for its $4.4 billion purchase of Formula 1 from the Fédération Internationale de l'Automobile (“FIA”), the governing body for the motor racing icon and the final hurdle in closing the deal.

Liberty received approval from its shareholders on Jan. 17, regarding the issuance of new series C shares in connection to the Formul 1 acquisition and to change its name to Formula 1 Group after the deal is closed. That closing is expected by the end of this month.

Liberty agreed to buy Formula 1 in September.

As part of that announcement, Liberty said former 21st Century Fox executive vice chairman Chase Carey would become chairman of the Formula 1 Group.

Liberty Media said it has received the required approvals from the appropriate anti-trust authorities in connection with its planned purchase of motor racing icon Formula 1.

Liberty first announced the deal, valued at about $4.4 billion, in September.

The deal, expected to be completed in the first quarter of 2017, still has a few hurdles to clear, including receiving approval from Liberty shareholders regarding the issuance of new shares to finance the transaction, at a special meeting scheduled for Jan. 17. The deal also needs to receive a nod from the Fédération Internationale de l'Automobile, the governing body of Formula 1.

Liberty Media said it will issue Series C common stock worth $1.55 billion to third party companies in an effort to help fund its $4.4 billion purchase of motor racing icon Formula 1.

In a statement, Liberty said it issued the Series C common stock at $25 per share to Coatue Management, L.L.C., the D. E. Shaw group, JANA Partners LLC, Ruane, Cunniff & Goldfarb Inc., Soroban Capital Partners LP, SPO Advisory Corp., and Viking Global Investors LP. The issuance of the shares will be completed concurrently with the completion of the Formula 1 acquisition.

"We are excited that this impressive list of investors will participate in the acquisition of Formula 1,” Liberty CEO Greg Maffei said in a statement. “This group shares our enthusiasm for the sport and our belief in the opportunity to develop and grow it for the benefit of the fans, teams, sponsors and our shareholders. We look forward to closing the transaction in early 2017.”

Liberty agreed to purchase Formula 1 in September.

Liberty said the proceeds from the issuance will be used to increase the cash portion of the consideration payable to the selling Formula 1 shareholders, led by CVC Capital Partners. As a result, the number of Series C Liberty (LMCK) shares issuable to the Selling Shareholders at the closing of the Formula 1 acquisition will be reduced from approximately 138 million to approximately 76 million. The total number of LMCK shares to be issued by Liberty Media in connection with the acquisition of Formula 1, to both the selling shareholders and the third party investors, remains unchanged at approximately 138 million shares.

“This is a significant step in Liberty Media’s transformative acquisition of Formula 1 and is further confirmation that the future of the sport is bright,” Formula 1 chairman Chase Carey said in a statement.

John Malone’s systematic transformation of Liberty Media continued last week, after the former programming juggernaut agreed to purchase international racing icon Formula One in a $4.4 billion deal.

After the deal is sealed — expected in early 2017 — Liberty Media Group will change its corporate name to Formula One Group and retire its NASDAQ stock exchange ticker symbol “LMCA,” replacing it with “FWON.”

The Liberty Media Corp. name will live on, at least in the ether — Liberty Media Group is officially a tracking stock of Liberty Media Corp., along with Liberty Braves and Liberty Sirius, which will remain separate.

Malone, Liberty Media chairman, has spent the better part of the past decade breaking apart and spinning off the Liberty assets in a flurry of deals. Liberty Media, which used to house interests in major programmers like Discovery Communications and QVC, has long since spun those holdings out to shareholders.

DEALMAKER’S LATEST DEAL

The deal is the latest over the past three years by the mogul known for dealmaking, beginning with his purchase of a 27% interest in Charter Communications in 2013. In the wake of that deal, Malone helped engineer Charter’s $78.7 billion purchase of Time Warner Cable and its $10.4 billion buy of Bright House Networks.

Other Malone holdings have gone on international buying sprees, like Discovery Communications, which earlier this year bought sports network Eurosport in 2015 and European Olympics rights for the 2018-2024 games.

In addition, Malone was a key part of Lionsgate’s $4.4 billion purchase of premium channel Starz in June.

Liberty has been in pursuit of Formula One since 2014, when speculation was high Liberty would team with Discovery to buy a 49% interest in the racing icon for about $4 billion. That deal never materialized, but with the most recent transaction, Liberty will get control of one of the hottest properties in international sports.

Formula One splits its revenue between race promotions — it holds the FIA F1 World Championship, among other races — broadcasting, advertising and sponsorship, and other businesses including TV production, hospitality and licensing, according to Liberty. With revenue of about $1.8 billion in the past 12 months, Formula One said it has $9.3 billion in revenue under long-term contracts through 2026.

Liberty shareholders will own 35% of Formula One’s equity (including about 3.1% for Malone personally), with partner CVC Capital Partners controlling 65%. In addition, former 21st Century Fox executive Chase Carey, long a confidante of Fox chairman Rupert Murdoch, will become Formula One’s new chairman after the deal closes, replacing Nestle chairman Peter Brabeck-Letmathe. Controversial British financier Bernie Ecclestone, who built Formula One into a global operation after nearly 40 years, will remain as CEO.

In typical Liberty fashion, the deal is a complicated one. Liberty closed the first part of the deal on Sept. 7, purchasing an 18.7% stake in Formula One for about $746 million. In the second stage, expected to be completed in the first quarter of 2017, Liberty will purchase the remaining voting interest in the company for about $300 million in cash, $350 million in notes and by issuing about 138 million shares of stock worth about $2.9 billion.

On a conference call with analysts to discuss the transaction, Carey said he would build Formula One’s fan base by telling its story. Formula One already is one of the most popular sports properties in the world, with more than 400 million global viewers, but has had difficulty cracking the U.S. market, which is dominated by NASCAR stock car racing. But U.S. viewership is growing, up by about 40% since NBC Sports won domestic broadcast rights in 2013.

DIGITAL GROWTH OPPORTUNITY

Liberty Media CEO Greg Maffei said on the call that the company believes there is opportunity to grow Formula One’s “underdeveloped” digital assets, adding that the company could grow its fan base and revenue through new technologies like virtual reality and via video games.

“There’s interest in this sport around the world,” Carey said on the call. “We want to continue to intelligently explore the opportunities and continue to grow it.”

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak, called Formula One a “prototypical Malone investment” in that it has a high barrier to entry, a lasting business, evidenced by the $9.3 billion in long-term contracted revenue, and appears to have strong expansion opportunities.

“As we have seen with the NFL, you can expand your broadcast rights fees and create alternative distribution channels (national nets, to DirecTV [NFL] Sunday Ticket, to Thursday Night Football to the RedZone channel),” Wlodarczak wrote in an e-mail message. “They could also look into expansion of races from 21 to the current contractual limit of 25 (the U.S. could be a massive driver of growth long term), repricing of TV contracts materially higher, leveraging ‘sister’ Liberty companies [Liberty Global] and [Discovery’s] Eurosport, expanding digital opportunities.”

Liberty Media, ending years of speculation, said it will purchase racing icon Formula One from a consortium led by CVC Capital Partners for $4.4 billion.

Liberty Media headed by legendary dealmaker John Malone, has been in the hunt for the racing company since at least 2014.

According to Liberty, the transaction comprises cash and newly issued shares in the Liberty Media Group tracking stock and a debt instrument exchangeable into shares of LMCK. The transaction price represents an enterprise value for Formula One of $8 billion and an equity value of $4.4 billion.

In typical Liberty fashion, the deal isn’t an easy one. According to terms, Liberty will acquire 100% of Formula One parent Delta Topco by first buying an 18.7% interest in the unit for $746 million in cash. Former 21st Century Fox vice chairman Chase Carey has been named chairman of Delta Topco, succeeding Peter Brabeck-Letmathe, who will remain on Formula One’s board as a non-executive director. Bernie Ecclestone will remain Formula One’s CEO.

“I am thrilled to take up the role of Chairman of Formula One and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team, Carey said in a statement. “I greatly admire Formula One as a unique global sports entertainment franchise attracting hundreds of millions of fans each season from all around the world. I see great opportunity to help Formula One continue to develop and prosper for the benefit of the sport, fans, teams and investors alike.”

After completion of the acquisition, Liberty Media will own Formula One and it will be attributed to the Liberty Media Group which will be renamed the Formula One Group. The consortium of sellers led by CVC will own about 65% of the Formula One Group’s equity and will have board representation at Formula One to support Liberty Media in continuing to develop the full potential of the sport. In addition, a CVC representative will be joining the Liberty Media Board of Directors.

“We are excited to become part of Formula One,” Liberty Media CEO Greg Maffei said in a statement. “We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholders. We look forward to working closely with Chase Carey and Bernie Ecclestone to support the next phase of growth for this hugely popular global sport.”

The selling stockholders will receive a mix of consideration comprising: $1.1 billion in cash, 138 million newly issued shares of LMCK and a $351 million exchangeable debt instrument to be issued by Formula One and exchangeable into shares of LMCK. Upon completion of the acquisition, the Liberty Media Group will be renamed the Formula One Group and the ticker symbols for its shares will change to FWON. Formula One will remain based in London.

“I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them,” Ecclestone said in a statement.

Liberty Media said it has named Mark Carleton chief financial officer, effective Oct. 1, replacing long-time executive Christopher Shean, who will become a senior advisor to the company.

Carleton, who will report to Liberty CEO Greg Maffei, has been with Liberty Media since 2003, most recently as Chief Development Officer. Prior to joining Liberty, Carleton served as a partner in accounting firm KPMG, where he was responsible for the communications sector and served on KPMG’s board of directors.

Shean, who had served as Liberty’s CFO since 2011, has been named Senior Advisor, reporting to Maffei and overseeing certain of Liberty Media’s significant investments. Shean has been with Liberty Media since 2000.

In conjunction with Carleton’s appointment as CFO, Liberty said Albert Rosenthaler has been appointed Chief Corporate Development Officer, reporting to Maffei. In that position he will be responsible for identifying and pursuing investment and other opportunities and will assist in setting strategic direction to maximize shareholder value.

Rosenthaler also will also oversee Liberty Media’s senior tax officer who will have day-to-day responsibility for aspects of Liberty Media’s tax strategies and compliance.

Rosenthaler most recently served as Chief Tax Officer, and has served as top tax officer for Liberty Media and its predecessors since 2002. Prior to joining Liberty Media’s predecessors, he was a tax partner at Arthur Andersen serving clients in the cable television, telecommunications, oil and gas, public utilities and financial services businesses.    

"We are pleased to announce these management changes, which will benefit the organization," Maffei said in a statement. "We congratulate Mark, Chris, and Albert and look forward to their continued service at Liberty Media in these new roles.”

Starz president Glenn Curtis, a long-time veteran of the company, will retire effective July 1, according to documents filed with the Securities and Exchange Commission.

As part of his separation agreement, Curtis, 56, will receive a lump sum payment of $828,750 and monthly payments beginning Jan. 1 and ending Dec. 31, 2017 equal to the difference between his monthly base salary and any other compensation he receives from another employer.

According to Starz’ proxy statement, Curtis’ base salary in 2015 was $700,000 and he received total compensation of $2.7 million for the year, an increase of 23% over the $2.2 million he earned in 2014.

Curtis was named president in 2013 and also served as president of Starz LLC and Starz Entertainment since February 2012. He reported directly to Starz CEO Chris Albrecht. Curtis served as executive vice president and chief financial officer at the programmer from 2006 to 2012. Prior to that, Curtis served as a vice president of Liberty Media, Starz’ former parent, and was CFO of the Starz Encore Group from 1995 to 2002.     

Liberty media chairman and cable legend John Malone will receive the 2016 Steven J. Ross Humanitarian Award at the UJA-Federation of New York’s Leadership Awards Dinner on May 18.

The award honors the late former chairman of Time Warner Inc., a visionary and renowned philanthropist. Ross built a family funeral parlor business into Warner Communications, and created Time Warner Inc. in 1989 after merging with Time Inc. He died of prostate cancer in 1992. 

The event will take place at Cipriani in Manhattan and will feature a conversation between Malone and PBS newsman Charlie Rose and feature a performance by Country star Kenny Chesney.  

Among those attending will be IAC chairman Barry Diller, Liberty Global CEO Mike Fries, Liberty Media CEO Greg Maffei, Comcast chairman and CEO Brian Roberts, Discovery Communications CEO David Zaslav, LionTree Advisors CEO Aryeh Bourkoff, and many other industry and media leaders.

Liberty Media’s three new trackers had a mixed debut on the NASDAQ  stock exchange Monday, with Liberty Braves Group and Liberty Media Corp. falling sharply while its Liberty Sirius tracker rose more than 10%.

Liberty completed its recapitalization into three trackers on Friday – Liberty Braves Group, including its interest in the Atlanta Braves Major League Baseball team; Liberty Sirus, including its interest in Sirius XM satellite radio; and Liberty Media, its other assets including ecommerce companies bodybulding.com and its minority holdings in Time Warner Inc. and Viacom. Liberty first announced the intention to spin the units in November.

In the recapitalization, , each issued and outstanding share of Liberty's existing common stock was reclassified and exchanged for one share of the corresponding series of Liberty SiriusXM common stock, 0.1 of a share of the corresponding series of Liberty Braves common stock and 0.25 of a share of the corresponding series of Liberty Media common stock.

The trackers began trading on NASDAQ on April 18, under the symbols BATRA (Liberty Braves), LSXMA (Liberty Sirius) and LMCA (Liberty Media).

Liberty Braves opened at $36 per share but quickly plummeted in early trading Monday, closing at $19.95each, down 44.6% or $16.05 per share, followed by Liberty Media, which opened at $27.43 each but fell 31% ($8.40 each) to close at $19.03 each.

Liberty Sirius was the lone bright spot, rising 11.4% ($3.20 each) to close at $31.20 per share, up from its debut of $28 per share.

Tracking stocks are a common vehicle for Liberty to unlock the value of its holdings. In the past it has created trackers for its holdings in QVC Group and its Latin American cable holdings (LiLAC Group).

NEW YORK — Before Liberty Global’s investor day meeting earlier this month, Multichannel News and Broadcasting & Cable editorial director Mark Robichaux sat down with chairman John Malone to ask him about the state of the cable industry. Later that day, before a crowd of investors and Wall Street analysts, Malone would unveil a set of complex tracking stocks to follow the far-flung tentacles of his media companies here and afar. The conversation digressed, frequently, and in his classic Socratic style, Malone — who spoke more like a business professor than a global media chairman — ended up asking more questions than he answered. Still a big cheerleader for Charter Communications, Malone shared his opinion on buying versus partnering, his dim view about the go-it-alone over-the-top cable network business model, and the beauty of a scalable business serving billions of people in Asia.

MCN:This last quarter seemed to better than most in terms of subscriber retention for cable operators. Do you think it’s sustainable?

John Malone: The industry is doing better. I mean, I don’t have the inside look at anything other than Charter in terms of U.S. cable. But I would say in Charter’s case, absolutely it’s sustainable. They are delivering a value package to consumers.

If you think about it, it’s all-digital, it’s all high-definition on the video side, it’s higher-speed Internet and it’s simple. There’s a package. And the public seems to like that.

If [customers] have to contact the company, the company’s CSRs are here in the U.S.; they are well trained and the services are straightforward. So, if you can make the relationship with the customer painless and give them a lot of value, I think that’s Tom’s [Charter CEO Tom Rutledge] whole approach.

MCN:A lot of those gains for cable seem to be coming from telephone and satellite companies.

JM: I think that it’s just a better service. Very simple: You give the consumer a better service. You should gain share if you’re better than your competitor. There is no mystery to it.

What Tom’s secret, I think is, is demanding simplicity, consistency. And in his view, you give the consumer value. You look at what you’ve got to give them and you try and give them a package that conveys the most value for the least dollars. And that’s what you train your people to deliver.

And if you can do that consistently, you win. Now the big capital commitment that Charter made — people forget about this — was going all-digital. This is not something you can do overnight, it’s not something that will happen in Time Warner [Cable systems that Charter is acquiring] overnight.

But once you get people into that platform to where your program guide can be in the cloud and the quality of your television picture is very consistent and it’s all high-def, you can do everything easier.

MCN:Will cable operators continue to take more share from telco and satellite competitors?

JM: If your network is reliable and your pictures are consistent — it’s Cable Operating 101. And if you do it really well, better than the other guy, you’re going to gain share and you’re going to grow. Now having watched Tom and his team, that’s what they do. It’s not rocket science, it’s discipline.

Incidentally, I saw Chase Carey do exactly that with DirecTV when he went there. It was just blocking and tackling. Let’s get rid of these contract installers. Let’s have our own people, let’s train them well and let’s hold them accountable. The guy who delivers the goods gains share and grows, and I think that it’s just as simple as that.

MCN:Many in the industry are obsessed with “cord-cutters” and over-the-top video delivery. What’s your take?

JM: OTT will continue to grow and succeed and be experimented with. And in some cases, the services will be supplemental to some other package. In some cases and in some households, it’ll be replacement. And the bottom line is connectivity is here to stay, both stationary and mobile. The question really is, who can provide it in the best way?

There are always going to be content aggregators, in my mind, because there’s no one entity that has enough stuff. The public’s not gonna want to have 27 subscription services and 27 different bills. So is the NFL big enough to go stand-alone subscription? Yeah, maybe — maybe. But the distribution curve looks like this. [Draws a big hump in the air with his finger.] Demand — there is a lot of demand right here, that’s the sweet spot, but can you walk away from this revenue and this revenue? Right?

Here, I’m talking about the distribution of demand at various price levels. So I mean when everybody talks how about ESPN would do great as a standalone service, well, they get about 20% reach at $10, or whatever it is, and they wouldn’t have a business. That’s why they don’t unbundle. Now, if you took all the Disney content and you could create an over-the-top with the network … you might be big enough to have something that might reach 70% penetration of households with an affiliate fee that, therefore, could be low enough.

This is what Apple is struggling with right now. Can they find enough stuff — cheap enough but good enough — that they can offer a service that’s better than the cable bundle, right?

MCN:Can they?

JM: Well, I don’t know. The jury is out. But … what they think they bring to the table is a superior consumer interface. And the question is, can they then populate that consumer interface with enough content that they can deliver their own version of cable TV in a sort of an over-the-top way and get enough scale to drive their hardware and their software? In other words, can they bring the TV set into the Apple ecosystem?

Now you could say, “Well if [Comcast chairman and CEO] Brian [Roberts] or Time Warner had said to [Apple CEO] Tim Cook, ‘We would love to endorse and embrace your set-top or device and ecosystem, and we think that adds enough value to our services and to our customers that this can be an industrial product’ — then Tim probably wouldn’t be out trying to put together his own cable service.” But nobody wanted to put an Apple device between their network and the consumer.

MCN:Don’t you think that’s justified? Why bring in a middleman — X1 is doing just fine.

JM: That’s a business decision. See, if I was a little guy, I would say, “Come help me figure this out, ’cause I can’t do it and there’s nobody doing it for me.” Right?

But if you’re Brian, you’ve got 3,000 engineers working on this; you say, “Who the hell needs Apple, we have a better mousetrap and why would we put them into our food chain?”

Now Brian thinks he can do it himself; he’s trying very hard. [Liberty Global CEO] Mike Fries believes he can do it himself.

We’re working, by the way, with Comcast on common technology. Cox makes a decision to use X1. Let’s piggyback on all of this technology investment that Brian is making. Let’s not let Apple in, let’s let Brian in. We trust Brian more …

MCN:It’s the devil you know.

JM: Yeah, it’s the devil we know.

MCN:What’s your vision for Lionsgate? [Liberty Global and Discovery Communications acquired 3.4% stakes in the company earlier this month.]

JM: I’m just a director in Lionsgate. Lionsgate has these great production capabilities in both theatrical and video, television. The idea is, by working together, can we create more value for Lionsgate content by making it more global? From Discovery’s point of view, can Lionsgate help them up the game in scripted with a certain amount of scripted content to essentially improve the quality perception of Discovery programming? Is there a nexus there?

From an LGI [Liberty Global] point of view, can working with Lionsgate help LGI with the equivalent of their X1 VOD service? I mean LGI is on the same page that Brian is. We want to have a massive random-access VOD offering that is just part of our service so that when you sign up for — call it the big bundle — you get everything: TV everywhere, all platforms, all systems, all you can eat, whenever you want it, everywhere you want it. And we think, to a large degree, that will reduce the demand for some of these narrow over-the-top services. Not entirely but, you know …

MCN:What’s your opinion of Lionsgate CEO Jon Feltheimer?

JM: Everybody speaks well of him. I think they are a very good organization. They are an independent production business, and they want to stay independent. If I’m in an area that I don’t know, I always go to people who I think do know. So I call [IAC chairman and longtime media executive Barry] Diller up and I say, “What do you think of these guys?” and he said, “They are absolutely as good as it gets.” So that’s a big endorsement.

MCN:Outside of Comcast and NBCUniversal, not that many people still combine distribution and content. Is there anything to these theories of content is king or distribution is queen or …

JM: It’s whatever works. It is certainly working for Comcast at this point. Steve Burke has done a great job.

MCN:Are you leaning in that direction now, marrying distribution and content?

JM: Well no. I’m just an investor. If Mike [Fries] wanted to go vertical, what he has done is he’s gone out and made a few investments — like this Lionsgate one — testing the water, seeing if there’s a “there” there. He’s a 9.9% shareholder of ITV, for instance. He did All-3 Media with Discovery to start testing the waters, let’s call it. Now he’s got this small stake with me and with [Discovery Communications CEO David Zaslav] and Lionsgate.

This is what I call the very early stages of trying to explore the synergies of working together; not necessarily that you’ve got to own it, but if you understand what they’ve got and what they’re trying to achieve, and you understand what you’ve got and what you’re trying to achieve, maybe somewhere there is a pony in there by working together.

There’s a lot of common interests that you can create value in by working together, not necessarily combining but just understanding other industry perspectives. And you know, if you ask me what I try to do, I try to be a synthesizer of these kinds of things, of trying to understand what fits with what. You’re always trying to say, “Gee, could you create something interesting, unique or more valuable that you could do this over here and this over here?”

And you take shots. I have always had a theory that if a cable company could own a broadcast enterprise in its market, that could be an important synergy for advertising, promotion,to give you access to content that you otherwise wouldn’t have access to.

Does it lead anywhere? I don’t know. We just bought Channel 3 in Ireland, the No. 1 Irish-based TV station. And we’ll see. We bought a 50% interest in a Belgian TV station.

Of course, Discovery went out and bought SBS, which is the No. 1 or the No. 2 broadcaster in Scandinavia. It has really worked well for Discovery. The question is, does it work well for a distributor to do that?

MCN:Do you think there’s more opportunity abroad than there is in the U.S. in terms of broadband and cable?

JM: There is more growth-potential opportunity internationally. It’s not necessarily financially that easy. I mean, some of these markets are very, very tricky. You have political, economic and regulatory issues.

Some of these, like China, remain intriguing but I haven’t met anybody yet that made a lot of money in China and got it out. So hope springs eternal. The Asian markets are still pretty tough. If you get it right, anything divided by 3 billion households makes your cost per household look pretty low.

I mean, this is the secret of Facebook. This is why the Internet entrepreneurs, with global standards and global reach, can go from nothing to huge overnight, ‘cause they’re dealing with another couple of zeros.

So if [Facebook founder and CEO] Mark Zuckerberg has 1 billion average daily users, just think about that. No wonder these guys are seeing their market caps go through the roof. That’s something to understand and emulate and try and copy if you can.

MCN:How do you see the U.S. market consolidating?

JM: You have some free radicals floating around on the content side that you could still see aggregation taking place that would have a lot of synergy. And I mean, some of it’s driven by ego, but most of it’s driven by synergy.

Liberty Media chairman John Malone said he doubted that Altice chairman Patrick Drahi will be able to achieve the cost synergies he has claimed in his $17.7 billion purchase of Cablevision Systems, adding that the European telecom company risks damaging the cable company’s competitive position.

In announcing its deal with Cablevision in September, Altice said it expected to extract $900 million in cost synergies from Cablevision over time, a figure many analysts said was overly optimistic. At an industry conference shortly after the announcement, Drahi offered more detail, saying the telco could remove amplifiers and other electronics from the network to make it more efficient. 

At Liberty Media’s investor day in New York, Malone said that Altice will be able to extract some synergies from Cablevision; the level they have been talking about would be hard to achieve.

Malone said Altice had tremendous success in its purchase of French wireless company SFR, and applying cable operating tenets to the much more loosely run wireless business resulted in big savings. But teh cable business is a lot different than the wireless business.

“I suspect he [Drahi] is being pretty aggressive in his projection of savings in his Cablevision transaction,” Malone said. “I think he will find some efficiencies, but I would be very surprised if he could generate operating savings at the level that had been talked about without damaging his competitive position in the market place. New York in particular is a tough market.”

He noted that Cablevision has a deep-pocketed, high-quality competitor in New York – Verizon’s FiOS TV.

“I think Patrick will end up being fine, but I doubt that he’ll generate as strong a wealth-building enterprise as he’s predicted,” Malone said.

Charter Communications CEO Tom Rutledge, who presented at the Liberty conference and ran Cablevision as chief operating officer for almost a decade, added that Drahi may be applying European operating metrics to the U.S. industry, which have  much higher content costs. He added that if you put cable operating margins in the European model, they would work out to be more than 50%. Drahi has complained that Cablevision’s margins are in the 32% range.

“When you take out all of that stuff, I think you have comparable margins,” Rutledge said. “Some of the things Patrick said involved taking out electronics from the network. These are multi-year projects. To assume you could do that in one fell swoop I think is really difficult. Could it be done through time? Possibly, with investment.”

Liberty CEO Greg Maffei added that he has told Altice CEO Dexter Goei, a long-time friend, that there are three ways Altice’s entrance in the U.S. cable market could play out.

“Either you’re going to do something really well and we’re going to learn and be better for it and we’re going to go to school, or you’re going to do something really well and get so wealthy that you can buy us for a really big price, or you’re going to fail in which case we’re going to buy you cheap,” Maffei said. “All three of those scenarios are actually pretty additive for Charter.”

The cable industry faces the prospect of more regulation, more competition from over-the-top providers and more consolidation overall, but Liberty Media chairman John Malone said fears that the cable business is headed for the scrap heap are exaggerated.

Anyone with any history in the business knows that cable’s demise has been predicted almost from its start more than 50 years ago, and the industry has managed to survive, and thrive, through it all.

Lately, though, the naysayers have been in overdrive, seeing the overhanging threats of Title II regulation and “cable killer” over-the-top video packages coming from Sony, Verizon Communications, Dish Network and others.

Malone has weathered his share of onerous regulation and competitive threats in the past, and he offered some needed perspective at his company’s latest investor day.

NOT PANICKING

The spur was President Obama’s statements favoring the stricter Title II approach to broadband oversight. Malone said he believes Federal Communications Commission chairman Tom Wheeler, who has favored a hybrid approach in the past, will work out a compromise, though the option of Title IIbased common-carrier regulations can’t be ruled out.

“My guess is Tom Wheeler will be able to thread the needle here and do something that satisfies some cosmetic concerns,” Malone said. “There is no abuse that anybody can point to that is material that will justify a heavy-handed government intervention at this point.”

The industry also has struggled with the issue of rising content costs. On that front, Malone said the linear approach — in which distributors bundle desirable programming into a package they hope will be profitable and doesn’t cost so much that viewers will defect — would eventually go away.

“I predict that that model will change over time,” he said. “In some cases, it will change with the cooperation and involvement of the distributor, particularly as you make the change from linear to random-access.

“I think you’re seeing increasing friction because of the price pressure on content,” Malone said. “So much of the oxygen has been taken out of the room by sports and the rising cost of sports that it’s putting pressure on distributors who are trying to control costs wherever they can and are likely to put more pressure back on the weaker suppliers than the ones they would like to retaliate [against], but they can’t.

“It really is a phenomenon we are seeing,” he added. “If 80% of the incremental price pass-through is going to the sports supplier, there is very little room for inflation or budgetary increases for the non-sports-driven.”

One way to combat those rising costs is for distributors to get bigger, something Malone has been a huge proponent of, especially through Liberty’s investment in Charter Communications.

Liberty’s $2.6 billion investment last year in of 27% of Charter’s stock helped fuel the MSO’s attempt to acquire Time Warner Cable. And though Charter ultimately did not win that prize — Comcast did, in a $69 billion deal that should close early next year — the midsized operator reached a compromise that will double its footprint in a series of swaps, sales and spins after the larger deal is completed.

Charter is expected to be a major player in an anticipated consolidation wave after the close of the Comcast-Time Warner Cable deal. Malone said he sees Charter as a vehicle for rolling up the sector’s smaller companies.

As technology becomes more complicated, Malone said, the ability to offer new services in a rational way would drive industry consolidation.

SCALING TO INNOVATE

“Small guys just can’t do what [Charter CEO] Tom [Rutledge] is doing,” Malone said. “They’re not going to be able to do virtual call centers. They’re not going to have the ability, even if they had the scale, to buy global equipment. They are not going to have the technical staff to be able to keep up with it. All of these things are driving toward larger ownership.”

That thirst for scale will continue even if the Comcast-TWC merger isn’t completed. Malone said if regulation becomes the straw that breaks the Comcast-TWC deal’s back, he hopes Charter would be ready to swoop in.

“Hell, yes,” Malone answered as to whether he hoped Charter would rekindle its pursuit of TWC if the Comcast deal were scrapped. “That being said, we’re happy with the deal that was negotiated. In many ways, in our view, it’s a better deal than going after 100% of TWC.”

Discovery Communications could be eyeing the creation of European regional sports networks built on the Pan-European sports networks it already controls through its recently acquired Eurosport channels.

Silver Spring, Md.-based Discovery bought a controlling (51%) interest in Eurosport in May. The service has several pay TV brands — Eurosport, Eurosport HD, Eurosport 2, Eurosport 2 HD, Eurosport Asia-Pacific and Eurosportnews — that generally have focused on lower-cost rights like German Bundesliga soccer outside of Germany, skiing and cycling. The channels recently scored ratings gains with French Open tennis matches, averaging about 1.36 million viewers, and broke the 50-million viewer mark in France with cycling’s Tour de France.

“We think we can build Eurosport by being strategic and working with our partners,” Discovery CEO David Zaslav said at the Communacopia conference last week. Eurosport “has one feed that is sold on a Pan-European basis; we can put it into all 70 countries without adding one sales person. We also have a strong local presence. In some cases we think we can build a very strong local sports channel.”

Zaslav coyly replied “maybe” when asked whether those channels would be based on a U.S. regional sports network model.

The time might be ripe for European regional sports, Lee Berke, CEO of sports consultancy LHB Sports, Entertainment & Media, said.

While most prestige rights are locked into long-term contracts with big European distributors — such as BSkyB’s and BT’s $4.9-billion, three-year lock on England’s Barclays Premier League soccer — Berke sees room for channels built around a particular sport or team. “That’s where I think you can get some traction,” he said.

The biggest questions are which rights, which sports and how much money would Discovery be willing to spend. But the programmer has been willing to open its checkbook. This year, it teamed with Liberty Global to buy production company All3Media for about $1 billion and is expected to team up with Liberty Media to bid on a 49% stake in Formula One Racing, worth about $4 billion.

Berke also said Eurosport could build channels around supplemental and shoulder programming from teams, as well as regional skiing, Scandinavian hockey and European basketball.

Other U.S. networks’ efforts to secure major rights in Europe have not had much long-term success. ESPN, for example, had Barclays Premier League rights for a time, but then sold its U.K. and Ireland channels to BT last year. ESPN still has a strong digital European presence through its espn.co.uk website and others, but has shifted international focus mainly towards Latin America.

That could mean the market has room for a well-run competitor, and Eurosport has the experience to possibly pull it off, Berke said. “They have navigated their way through distribution country by country,” he said. “ My guess is they’re saying some of the same things we’re saying here in the U.S. — more interest in developing a range of programming on a range of screens and a range of distribution outlets.”

Multiscreen technology and content company Vubiquity has hired Adam Poulter as EVP and managing director for the EMEA (Europe, Middle East and Africa) region.

As the senior exec based at the company’s London headquarters, Poulter will be responsible for Vubiquity’s performance and growth for EMEA, as well as in Latin America.

Poulter most recently served as global SVP-content, digital and media at Liberty Media’s Ascent Media unit, where he headed up its global content business and developed digital distribution for several major Hollywood studios, including Walt Disney Company, Sony, Paramount and Warner Bros, and television distributors such as BBC Worldwide, Discovery Networks and IMG.

He previously served as CEO of Carlton Communications cinema division in Europe; CEO of Screenvision (formerly Technicolor’s Entertainment Services start-up in New York); CEO (Europe) of the digital ad network Miva Inc; and executive director of Red Bee Media under Macquarie Capital Funds.

“Adam brings strong leadership coupled with a very successful history of working with media clients around the world,” said Darcy Antonellis, CEO of Vubiquity, in a statement. “Adam is the perfect executive to lead Vubiquity's international organization supporting its partners with innovative media and entertainment products and services.”

Elsewhere on the international front, Vubiquity acquired U.K.-based video-on-demand content aggregation firm FilmFlex Movies Ltd. earlier this year.

Liberty Media said its Class C common stock will begin trading on the NASDAQ Global Select Market under the symbol “LMCKV” on a “when-issued” basis from July 8 to July 23.

Liberty, headed by cabvle legend John Malone, first announced in May  it would issue two shares of Series C stock for each share of its Class A and Class B common stock on July 7 as a dividend.

However, Liberty said in a statement that because NASDAQ has established July 24 as the ex-dividend date for the dividend, and as a result of related “due bill” trading procedures, persons acquiring shares of Liberty’s Series A common stock and Series B common stock in the market through July 23, 2014 will still receive shares of Series C common stock in the Dividend. Liberty currently anticipates that the payment date for the Dividend will be 5 p.m., New York City time, on July 23. Liberty expects that the Series C common stock will begin trading in the regular way on the NASDAQ Global Select Market under the symbol “LMCK” beginning on July 24.

Liberty Media said Thursday that it will sell off most of its stake in book retailer Barnes & Noble, ending a foray into the electronic book market the cable giant made three years ago.

In a statement, Liberty said it will sell its interest in B&N to “qualified institutional buyers,” retaining about 2% of its interest in the book seller. Liberty said the sales should close on April 8.

As a result of its reduced ownership, Liberty said it will no longer have the right to elect two members to Barnes & Noble’s board of directors, and effective April 8 Liberty CEO Greg Maffei will cease to serve on the B&N board. Liberty senior vice president Mark Carleton has been re-elected to the B&N board effective April 8.

“By reducing our preferred position and eliminating some of our related rights, Barnes & Noble will gain greater flexibility to accomplish their strategic objectives,” Maffei said in a statement. “We look forward to maintaining our relationship with the company.”

Liberty first invested about $204 million for a 17% stake in B&N in 2011, in what some analysts believed was an attempt to gain control of the retailer’s Nook electronic book technology. But as the Nook has foundered under competition from the Amazon Kindle, Liberty’s interest appeared to wane.

 “Liberty Media has been a strong supporter of the company and Greg Maffei and Mark Carleton have been and continue to be tremendous partners at an important time in the company’s history,” said Barnes & Noble chairman Leonard Riggio in a statement. “Liberty’s decision to retain a portion of its investment and have active involvement on our board underscores Liberty’s ongoing commitment to Barnes & Noble.”