Liberty ready to face Viacom

Freezes stake in DirecTV as it evaluates next move

Liberty Media president and CEO Greg Maffei heaped praise on satcaster DirecTV for its strong first-quarter results as management of Liberty's Starz unit said Thursday that it won't underestimate a possible challenge from a premium pay TV joint venture by Viacom, Lionsgate and MGM.

"We love the company," Maffei said about DirecTV. Liberty this week froze its stake in DirecTV at 47.9% as it evaluates possible scenarios. If Liberty, controlled by cable pioneer John Malone, raised its stake to more than 50%, it would have to make a bid for 100%.

The company said home shopping network QVC boosted first-quarter revenue 5% and operating cash flow 3% thanks to strong international growth. Starz reported a 3% revenue and 1% operating cash flow gain. A new branding campaign dragged down the bottom line.

Starz chairman and CEO Robert Clasen said deals with Viacom's Paramount and MGM lock up library titles "well into the next decade," and "it's going to be a challenge" to make the new three-way venture a success. But he said Starz will remain vigilant as one or two big partners could make it formidable.