Latest from Next TV in Maffei

At Liberty, Bigger Is Better

Mike Farrell — Tue, 08 Dec 2015 22:45:00 +0000

Liberty Media CEO Greg Maffei told an industry audience Tuesday that his company has a simple strategy – Go Big or Go Home.

“We have a thesis that bigger is better,” Maffei said at the UBS Global Media & Communications conference in New York. “The opportunity to write a $5 billion check as we did in Charter was relatively unique – we ended up writing $3 [billion] of it and bringing in partners for $2 [billion]. I think there is less competition in the big space, there are fewer people who can write a $5 billion check or an $3 billion check, particularly in TMT [Telecom Media and Technology]. Normally when you think about who writes a check like that for an acquisition it’s [legendary investor Warren] Buffett. He doesn’t really play as much in our space, thank you. We would love to be able to write another check for something, not necessarily to buy an entire company, but buy a big influential stake. That’s a pretty attractive place to play.”

And Liberty Media has a pretty good track record after writing those big checks. In the Charter deal, Liberty first purchased a 27% interest in the cable operator in 2013 for $2.6 billion, or about $95.50 per share and a year later placed that interest into a tracking stock called Liberty Broadband. When Charter agreed to purchase Time Warner Cable earlier this year, Liberty Broadband agreed to contribute about $4.3 billion of the $78.7 billion purchase price selling newly issued shares to third parties to acquire shares in a newly combined Charter-Time Warner Cable.

The Charter investment has worked out extremely well for Liberty – Charter stock closed at $186.59 each on Tuesday. And Maffei said Liberty would be willing to write more big checks if it could find other deals like it.

“We’ve been building relationships like the people who bundled alongside us in the Charter deal,” Maffei added. “And I can see us easily going forward in the future doing something where we put up half the capital but we brought others along as well.”

Liberty to Spin Off Cable Assets

Mike Farrell — Thu, 08 May 2014 17:45:00 +0000

Liberty Media said Thursday that it will go ahead with plans to spin-off its cable interests – mainly its 27% interest in Charter Communications – into a separately traded public company named Liberty Broadband.

Liberty first announced its intention to spin off the assets in a tracking stock in March. But the company said the transaction will be a hard-spin, similar to the one it made with former subsidiary Starz last year.

"We believe a separate Liberty Broadband will offer investors greater choice and transparency, and is well-timed with Charter's agreements with Comcast, which will result in Charter owning or serving over eight million video customers," Liberty CEO Greg Maffei said in a statement.

The move comes days after Charter agreed to a deal with Comcast that would involve the sale, swap and spin of about 3.9 million subscribers valued at about $20 billion.

With that deal, Charter would acquire 1.4 million customers from Time Warner Cable, would receive a 33% interest in a spin-off company with about 2.5 million customers. In addition, Comcast and Charter would swap systems with about 1.6 million customers.

Liberty Broadband would include Liberty’s Charter interest as well as its global positioning satellite subsidiary TruePosition, its minority equity investment in Time Warner Cable and certain deferred tax and deferred revenue liabilities, as well as liabilities related to the Time Warner call option.

Liberty Broadband could go off on its own to acquire cable assets, but Maffei said on a conference call with analysts to discuss first quarter results that Liberty’s respect for the Charter management team, the benefits of scale and the synergies inherent in the Charter assets “make it unlikely that we will go outside of them [Charter] inside the U.S.”

In the spin, Liberty shareholders would receive one-fourth of a share of Liberty Broadband common stock for each share of Liberty Media they own. In addition, stockholders will also receive a subscription right to acquire one share of Series C Liberty Broadband common stock for every five shares of Liberty Broadband common stock they receive in the spin-off.

Liberty said the subscription rights are being issued to raise capital for general corporate purposes of Liberty Broadband and will enable the holders to acquire shares of Series C Liberty Broadband common stock at a 20% discount to the 20-trading day volume weighted average trading price of the Series C Liberty Broadband common stock following the completion of the spin-off.

Liberty expects to complete the Liberty Broadband spin by the end of the year.

Liberty To Shed Bulk of B&N Stake

Mike Farrell — Thu, 03 Apr 2014 16:15:00 +0000

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.”