Liberty Global CEO Talks Content Strategy, Deals

Mike Fries Liberty Global CEO - P 2013
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Mike Fries Liberty Global CEO - P 2013

"Content for us is a means to an end," namely "driving the connectivity business," says Mike Fries

"Content for us is a means to an end," Liberty Global CEO Mike Fries told an investor conference on Wednesday. He said the end was "driving the connectivity business that is most important to us."

Speaking in the last session of the 42nd annual UBS Global Media and Communications Conference in New York, he said the company has acquired and invested in content businesses "in a very disciplined, tactical and opportunistic way" since selling its Chellomedia channels business to AMC Networks. The deals have focused on "other content forms that we think will drive the distribution business."

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The company spends $2.5 billion a year on content, meaning it already has "a pretty big investment in content delivery and content acquisition," Fries said. Liberty Global is controlled by Liberty Media CEO John Malone.

Liberty Global has acquired a small stake in British broadcaster ITV, bought U.K. production firm All3Media with Discovery Communications and has been said to have in the past year looked at buying the Formula One racing circuit with Discovery without a deal ever materializing.

"Sports is a killer app, so we'll look at interesting sports opportunities where we can," Fries told the UBS conference. "Original production drives SVOD platforms, and so will carefully look some original production opportunities." And free-to-air networks offer reach and scale, he added.

Overall, he called Liberty Global's content deal approach "offensive and very tactical." He added: "Each and every thing we've done will pay dividends for us strategically." Plus, he said the company has spend $300 million in aggregate on recent content deals. "It doesn't strike me as a huge bet," Fries concluded.

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Asked about Formula One, he said it is "an asset in transition in many ways having its own challenges today." He signaled that the company was not likely to commit to a Formula One deal at this time.

Asked about recent media reports that Vodafone may look to make a bid for Liberty Global, Fries said: "John [Malone] and I are 100 percent aligned. We believe in our business plan. We have a great platform" that will provide "significant" value for a good period of time. He added: "I can't add much to what has been speculated and discussed." Fries also said that deals Vodafone has done in Spain and Germany "are smart deals for them."

Discussing acquisition opportunities for Liberty Global in Europe, he said: "I'm not sure there is much left in Europe that you could easily bolt onto our business." He added that his team expects "good, solid" revenue and operating cash flow growth even without buying anything else.

"There are opportunities in Latin America," Fries also said. The company currently operates in Puerto Rico and Chile. While he didn't mention specific opportunities, he said "we will look at markets" rather than companies.

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Earller in the day, Liberty Global expanded its reach in Puerto Rico buying, together with Searchlight Capital Partners, Puerto Rico Cable Acquisition, which does business as Choice Cable TV, for about $272.5 million.

Asked about U.K. cable giant Virgin Media, which Liberty Global owns, has almost 20 percent of its subscribers on the quad play, meaning pay TV, broadband, telephony and mobile services. It is the "only complete operator" in Britain, Fries said. "I like our position."

Twitter: @georgszalai