Malone predicts more major acquisitions

Comcast-NBC Uni deal could open flood gates

NEW YORK -- If cable giant Comcast Corp. pulls off a deal that would give it control of NBC Universal without major regulatory restrictions, all major distributors will look for similar content acquisitions, Liberty Media chairman John Malone said here Friday.

Asked about the NBC Uni situation during a Q&A session at the firm's annual investors' meeting, he highlighted that he has "always believed" that combining content and distribution power "creates quite a bit of value opportunity." Other sector giants like News Corp. and Time Warner have separated content and distribution businesses though, citing a lack of significant synergies.

"We're looking for signals from government," Malone said about a possible wave of content plays by cable, satellite TV and telco firms.

If Comcast pulls off a deal for NBC Uni "without very substantial limitations" or "meaningful restrictions," Malone predicted, "every major distributor will look for ways" to add content, including DirecTV. The satellite giant is planning to merge with some Liberty assets.

Malone said he hopes DirecTV will have a new CEO in place in the next month or two, but he can't promise that will be the case.

Asked about the CEO's key focus areas, he said in case of a Comcast-NBC Uni deal, the new boss "will have to contemplate how to respond to that."

A new leader would also have to decide the future relationship or even a potential transaction with telecom giants. Some on Wall Street have suggested Verizon or AT&T could buy DirecTV or Dish down the line.

Malone Friday also predicted there will be a further "massive restructuring" of old-media businesses amid the continued rise of digital media, without giving specific scenarios. But he said Liberty's businesses are all looking for ways to "ride the wave" rather than being drowned by it.

Liberty CEO Greg Maffei said in prepared remarks at Friday's meeting that "2009 was a tough year for media companies," but "quite a good year for Liberty."

He said the merger of DirecTV with certain parts of Liberty should get regulatory approvals shortly, and shareholders will likely vote on it in mid or late November. The deal would close right after that.

The planned new Liberty Starz has an implied market capitalization of nearly $2 billion, but should have upside from there, according to Maffei.

Value drivers include continued execution (subscriber and revenue growth, as well as controls on content costs), possible multiple expansion, a potential equity shrink and synergistic investments, he said.

The two major overhangs for the stock that the firm plans to address are a loan to Liberty Interactive, which Maffei expects it to pay off soon, and the future of the firm's relationship with Starz Media, he said.
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