Sat TV has Liberty beaming
EmptyLiberty Media on Thursday reported mixed fourth-quarter results, with CEO Greg Maffei lauding satellite TV giant DirecTV Group as the company's new "strategic center" and its "fabulous" 2007 results.
His comments came just hours after a bullish DirecTV investor day in New York and one day after Liberty, controlled by John Malone, and Rupert Murdoch's News Corp. completed a stock-for-cash and assets swap that transferred control of the largest U.S. satellite firm to Liberty.
On the sidelines of the event, DirecTV president and CEO Chase Carey told The Hollywood Reporter that all News Corp. members on the firm's board have left their positions, with Malone having taken over the chairman role from Murdoch. Liberty and News Corp. said late Wednesday that Maffei and Malone had joined the board.
Carey also shot down Wall Street questions about his commitment to DirecTV, saying he's there to stay. "I'm as excited as I could be about DirecTV," he said.
Carey told investors that DirecTV was running "a little short" of its original subscriber growth forecast for 2006-08. Instead of 18 million customers, the company likely will boast about 17.5 million at year's end, he said. But he emphasized that "our business has never been stronger."
In 2010, the company expects to boost revenue to $20 billion, up 16% from the $17.3 billion reported for 2007, with cash flow before interest and taxes of about $4 billion, management said.
Carey also was asked about the upcoming loss of a service bundle partnership with AT&T in territories of the former BellSouth, which the telecom giant recently acquired. The loss is effective as of the second quarter, and Carey said competitor Dish Network will be AT&T's sole partner from then through September. However, that is when current arrangements end, and Carey said AT&T is still talking to both satellite TV providers as it decides which one to work with long-term.
The DirecTV CEO said he felt his firm is well positioned to continue its solid growth momentum either way.
Meanwhile, Liberty's financials for the final quarter of 2007 were mixed. Revenue at home shopping channel QVC and entertainment arm Starz rose 4% to $2.3 billion and 3% to $265 million, respectively, thanks to higher U.S. sales at QVC and subscriber gains at Starz.
QVC operating cash flow fell 5% to $531 million amid sluggishness in international markets and a sales shift to lower margin products. Starz operating cash flow declined 4% to $48 million in part because of increased marketing spending.
"Because of production and marketing costs, we expect that the losses at Starz Media will continue this year, but we are pleased with the progress we have made in forming a fully integrated media company with the ability to produce all kinds of programming and to distribute on all platforms," Starz chairman and CEO Robert Clasen said.
Maffei and Carey said that they expect their companies to discuss possible areas of increased cooperation and synergy soon.
Although no deal is imminent, he also signaled that the most likely next asset swap would come with Time Warner.
Meanwhile, Carey and his DirecTV team said they are looking forward to the launch of entertainment services in the coming months. During the second quarter, the company will launch DirecTV Movies Now, which will push selected movies to users' DVRs for on-demand viewing.
Also set to debut this year is DirecTV Media Share, which allows consumers to access personal and Internet content, including photos, music and videos, via their TV screens and view recorded TV content on their PCs.