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At Liberty, Bigger Is Better

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.”