John Malone’s media investments draw interest, not least smaller ones that signal the billionaire investor is playing his long game.
The latest possible deal drawing Wall Street chatter is Liberty Global Ventures, Liberty Global’s investment arm, eyeing a bid for Univision Communications after the Spanish-language broadcast giant once again put its coveted U.S. Hispanic audience on the auction block. “This is a small investment that Liberty Global Ventures is exploring,” a Liberty Global representative on Thursday told The Hollywood Reporter.
For its part, Univision is looking to give its private equity owners a long-awaited exit from the company after selling off Gizmodo Media Group, which includes the family of websites formerly known as Gawker Media.
Nabbing Univision could help a number of assets in which Malone owns stakes, such as cable giant Charter Communications and cable networks firm Discovery, to leverage access to the coveted U.S. Hispanic audience. And Liberty Global’s spinoff venture Liberty Latin America has operations in Chile, Puerto Rico, the Caribbean and other parts of Latin America that could also benefit from Univision content.
Univision in 2017 turned down a takeover offer from Discovery, a company in Malone’s investment orbit, with observers saying the mogul’s renewed interest in Univision only confirms the investor will happily return after being snubbed for a sweeter deal.
Pivotal Research Group analyst Jeffrey Wlodarczak tells THR that he feels it was “very unlikely Liberty Global would make this investment.” His take is that it would be “much more likely they would make a very small investment in keeping with their strategy around investing in content.”
But another Malone firm could jump in down the line. “A much more logical buyer if the Univision situation got really ugly would actually be sister company Liberty Media,” Wlodarczak suggests. “They could look to buy very senior debt at a big discount to have some say in a restructuring situation, but at the right price that is an interesting asset for Liberty.”
Malone’s Liberty Global, led by CEO Mike Fries, is a holding company for his European cable assets, including Virgin Media. And Liberty Media, led by CEO Greg Maffei and also controlled by Malone, includes media assets like satellite radio firm SiriusXM Radio, the Atlanta Braves and the Formula One racing circuit.
With still other media production and distribution holding companies in his investment orbit, Malone routinely combines or reshuffles his assets as streaming and telecom technologies evolve.
Wlodarczak argues that such an opportunistic small stake could allow the mogul to later take a control stake or outright ownership down the road. “The stakes may be able to give them learnings about related companies through board seats or relationships built with management. Sometimes they build stakes and end up moving to control,” he says.
The possible play for Univision after on-again, off-again discussions is similar to Malone’s playbook from 2017, when SiriusXM paid music streaming service Pandora $480 million for a 16 percent stake before buying Pandora outright in a $3.5 billion all-stock deal. Liberty Media earlier in 2013 picked up a small stake in SiriusXM, then replaced company boss Mel Karmazin for control of the company.
And Liberty Global’s 10 percent stake in ITV, acquired in 2014, gives Malone a boardroom seat and opens the door to a takeout of the British broadcaster.
Christopher Ali, an associate professor of media studies at the University of Virginia, sees Liberty Global’s possible Univision bid as Malone pursuing scale to more effectively deal with fast-consolidating media rivals. “Every year the M&A activity is heating up. And Malone wants to be part of this. We’re seeing CBS and Viacom, T-Mobile-Sprint in telecom,” Ali says. “He wants a piece of this M&A action, and Univision is his ‘in’ to start reassembling what he’s had before.”
With final bids for Univision due in February, Liberty Global Ventures — understood to be partnering with Hemisphere Media Group — isn’t alone in his interest for the Spanish-language broadcaster. Former Viacom CFO Wade Davis is leading a consortium of institutional investors also eyeing Univision, as is Platinum Equity, the Los Angeles-based private equity firm headed by Tom Gores.