Liberty Media CEO Talks Cable Consolidation, Charter Investment

Greg Maffei - P 2011
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Greg Maffei also says that Atlanta Braves baseball team has proven to be a better investment for the company than expected.

Liberty Media CEO Greg Maffei said Wednesday that the U.S. cable industry could see another round of consolidation. But he said his company will wait and see if Charter Communications, in which Liberty recently acquired a 27.3 percent stake, will be a buyer or seller.

Some analysts have suggested that Charter could drive cable consolidation given the history of Liberty and its chairman John Malone as acquirers. But on Liberty's first-quarter earnings conference call, Maffei left all options open.

"The Charter business plan on a standalone basis is very attractive," he said. Consolidation in U.S. cable could occur amid the availability of "relatively inexpensive" money, strong cable cash flows and synergies around content and network costs. The industry "could be in for a round of consolidation," Maffei argued. "Whether Charter is a consolidator or consolidee, we'll see."

He called Charter, led by former Cablevision Systems top executive Tom Rutledge, "an appealing investment" given its strong management team, "a relatively under-invested network" and a "relatively less competitive environment" given a lack of competition from Verizon's FiOS service in Charter markets. Maffei said that the decision to invest in Charter also came amid "a good environment to be in cable in general."

Asked about his plans to use rights to increase Liberty's Charter stake to 35 percent and eventually 40 percent, Maffei said there are currently no plans or decisions to go beyond the initial stake. Instead, Liberty will see how things play out.

Could Liberty sell the Atlanta Braves baseball team? Maffei said the team has turned out to be a "better investment than we might have originally anticipated." He added that Liberty was "very happy" that the Braves are currently in first position in the National League East, adding that contributes to making the team "the last thing we'll divest."

Asked to explain some of the positive factors of the Braves investment, Maffei said that changes to some of the team's TV rights arrangements are positive, and that the team's value continues to increase.

Discussing Liberty's 27 percent stake in Live Nation Entertainment, Maffei said the main challenge for the live events giant is "anemic" free cash flow growth, but the company is working with the company's team to address that. Liberty can raise its stake to 35 percent without board approval, he said.


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