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Liberty Media to Spin Off Starz

Liberty Media Wednesday announced plans to spin off Starz
LLC into a separate publicly traded company.

Executives said that spinoff would give investors a better
view of Starz' operations while creating added liquidity at Liberty Media.

"The senior Starz team and I are very energized by the
decision to make Starz its own independent company. I believe this stand-alone
structure is the first step to unlocking the real potential growth
opportunities for our businesses," Chris Albrecht, CEO, Starz, said in a

Albrecht said that the company's subscription businesses are
running at quarterly highs, Starz achieving 20.7 million subscribers and Encore
reaching 34.2 million at the end of the second quarter.

"We continue to add value to the networks with our
investment in quality original programming," he said.

Starz' revenue remained unchanged at $403 million for the
second quarter, according to Liberty Media's earnings announcement. An increase
in revenue for the Starz Channels business was offset by decreases in revenue
for the Starz Distribution and Starz Animation businesses.

According to the company, Liberty's board of directors
authorized a plan to distribute to the stockholders of Liberty Media shares of
a subsidiary that will hold all of the businesses, assets and liabilities of
Liberty Media not associated with Starz, LLC. The subsidiary, which would
become a separate public company, would be called Liberty Media Corporation, or
"New Liberty." The businesses, assets and liabilities not included in New
Liberty would be part of a separate public company called Starz. Starz will
consist of 100% of Starz LLC, approximately $1.5 billion in debt (assuming full
draw down of the Starz bank facility) and an undetermined amount of cash.

The spinoff is intended to be tax-free to stockholders of
Liberty Media and its completion will be subject to various conditions, the
company said. The spinoff will not require a stockholder vote and is currently
expected to occur in late 2012.