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The regulatory environment for cable operators will likely be more favorable under president-elect Donald Trump’s administration, Liberty Media president and CEO Greg Maffei said Wednesday.
“It’s hard to see how the regulatory environment will get worse under president-elect Trump than it was under the Obama administration and the FCC to date,” he said at the Morgan Stanley European Technology, Media and Telecom Conference in Barcelona in a session that was webcast. “We were constricted around net neutrality, we were constricted around usage-based pricing. It’s hard to imagine that theirs is going to be quite as onerous in a go-forward world. So I think there is upside.”
He added that the stock of Charter Communications, in which Liberty owns a big stake, traded up “nicely” on the news. And Maffei said: “The tech companies have had an enormous influence on the FCC and on…what they perceived were positive changes, but in the main were not positive for cable.”
He concluded: “So I think there is likely to be a swing back the other way, and that’s probably a positive on the regulatory front.”
Liberty Media chairman John Malone had told investors last week: “The deregulatory aspects of a Republican administration will be favorable. I think the likelihood you will see government intervening to support one particular industry’s goals, relative to another’s, is probably less risky today.”
Discussing AT&T’s planned $85.4 billion acquisition of Time Warner, which Trump has spoken out against, Maffei said: “I assume the AT&T Time Warner deal gets done. I think president-elect Trump has shown he is a great negotiator, likes to make those statements.” He predicted there would likely be a series of conditions put on the deal though.
Asked about the broader impact of the mega-deal, Maffei also said, “I am less fearful in some ways than John [Malone] is,” adding, “I don’t suspect it’s going to lead to as much of a round of M&A as John does.”
Asked about the outlook for additional major cable M&A, including for Charter, Maffei said: “There’s not that much left out there to buy.” The only company with real scale is Cox Communications, with roughly 4 million subscribers, whose owners seem to remain “very happy being independent.” He concluded: “There’s just not enough cable left to buy.”
Maffei on Wednesday also touted Liberty’s planned acquisition of Formula One and the upside for Liberty’s music-related businesses. With its stakes in SiriusXM and Live Nation, the company is “positioned to benefit from growth of global music,” he said.
Liberty in September agreed to acquire global motor sports business Formula One in a deal that values it at $4.4 billion and will occur in stages, with an initial purchase of $746 million for an 18.7 percent minority stake. The enterprise value for the racing circuit per the deal is $8 billion. Maffei touted upside from the likes of better TV rights deals and a planned OTT service for Formula One fans, as well as an increase in the number of races.
Former 21st Century Fox president and COO Chase Carey will become chairman of F1, replacing Nestle chairman Peter Brabeck-Letmathe. The 85-year-old Bernie Ecclestone will remain CEO.
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