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John Malone has made a career out of raising eyebrows. But why is his Liberty Media betting big on satellite TV giant DirecTV at a time when other sector biggies are shedding distribution arms to focus on their content businesses?

"Content and distribution help each other," Liberty president and CEO Greg Maffei said at the end of 2007, without getting more specific. A year earlier, he argued that Liberty's networks need more "distribution muscle."

Wall Street also points out that Liberty's content businesses, such as Starz and QVC, can use the leverage of a satellite TV cousin in showdowns with cable operators.

Miller Tabak analyst David Joyce cites the current HD push and Malone's longer-term vision as additional motivation. "Malone still likes that content-plus- distribution model because he wants to be more of the HD frontiersman, (and) there still is some necessity for distribution space to be allocated to the incremental HD channels," he says.

Using DirecTV to help gain carriage for the HD networks of another Liberty cousin, Discovery, also can "accelerate the path to profitability" for Discovery, Joyce says.

Whatever the day-to-day business rationale is, remember that the key word is "muscle." After all, owning Liberty's content assets and DirecTV makes Malone look much more like a mogul again.
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