John Malone's Liberty Media to Spin off Starz

John Malone's Liberty Media said Wednesday that it will spin off Starz.

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Liberty will try to highlight the value of the premium TV company, led by CEO Chris Albrecht.

"We are pleased to announce our plan to separate the assets of Liberty Media and Starz LLC, creating two separate asset-backed stocks," said Liberty president and CEO Greg Maffei. "This transaction will provide better transparency on the Starz operating business; optimize the Starz capital structure; permit us to better pursue our strategic objectives, including creating two currencies that could be used for acquisitions; and create significant liquidity at Liberty Media, which preserves all our options with respect to SiriusXM and Live Nation."

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

With Liberty reporting its latest financials on Wednesday, Albrecht also said that "the Starz subscription businesses are continuing their run of quarterly subscription highs, with Starz achieving 20.7 million subscribers and Encore reaching 34.2 million at the end of the second quarter."

Maffei also lauded Starz, saying it "again posted impressive subscriber gains, and we are excited for the upcoming premiere of season two of the Starz original series Boss next week."

The separation would actually see Liberty distribute to its shareholders stock of a subsidiary that will hold all of the businesses, assets and liabilities not associated with Starz. That subsidiary would become a new public company that will carry the Liberty Media name. The remaining entity will carry the Starz name and carry approximately $1.5 billion in debt and an undetermined amount of cash, Liberty said.

In classic Malone style, the spin-off, expected to ne completed in late 2012, is designed to be tax-free. The company said it requires government approvals, but no stockholder vote.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai