Q&A: Greg Maffei
CEO talks about the transition playing out at Liberty MediaNEW YORK -- In stints as president of Oracle, CFO of Microsoft and chairman of Expedia, Greg Maffei gained a reputation as a savvy dealmaker.
Since joining Liberty Media in November 2005 and assuming the role of president and CEO in March 2006, he has focused on transforming the holding company into an operating company.
He talked to THR about that shift as well as the current state of DirecTV and IAC.
The Hollywood Reporter: How do you and John Malone split up your work?
Greg Maffei: John is the chairman, so he has more of an oversight role. I am the one who brings the ideas more, drives things and looks for his buy-in when I do that. We have a partnership, but on a day-to-day basis, John has a testing, questioning and thinking role more, although he can take the lead on plenty of things.
THR: Have you pretty much completed your transformation into more of an operating company? Some have called Liberty a glorified holding company in the past.
Maffei: Certainly, a few years ago we were a holding company with some operating companies and more investments. But over the last few years with spin-outs and tracking stocks (Liberty Global, Discovery, Liberty Interactive, Liberty Entertainment) and asset swaps, we have really focused the business much more.
THR: What other deals and asset swaps could we still see?
Maffei: There are some deals out there for Time Warner and other investments. Liberty Capital is the place where most of that deal potential stands, and that's not insignificant, but there are not as many things that need to be done anymore strategically. The place where we are very much focused is working through the relationship between Liberty Entertainment and DirecTV, where we have a very large and influential position but not control.
THR: You and John are known as deal gurus. What should give investors confidence that you can actually operate too?
Maffei: If you look at how the businesses we own performed in the first quarter, that is a great testimony to Liberty's management team, not necessarily our great skills, but our ability to pick great managers who run things. DirecTV had an unbelievably good quarter. QVC had a quarter which may have been below its historical averages, but that business has performed very well compared to pretty much any other retailer of scale out there.
THR: After Time Warner spins off TW Cable, Liberty will be the only bigger media and entertainment company that owns content and a major distributor. Why do you still see value in that?
Maffei: That's a great question. You can look at the market and see people who have done really an excellent job taking both distribution and content. Historic examples would be (John Malone's) TCI and Liberty. But you have seen the market get less excited about integrated media companies. We really need to justify to the marketplace why we are an integrated media company, especially because we want to add more content to a now larger distribution arm. We do think there are synergies.
THR: What were the main issues you had with Barry Diller and IAC, and why did your agreement with him happen?
Maffei: We were always in favor of the spinoffs. We thought they were positive for creating value. There will be interesting opportunities in the spun-off companies. We really moved to get a resolution to make sure there was no further litigation, because it didn't really seem to be in either of our interest.
THR: Liberty won't have as big a say in the new setup. So, where is the value for you? Is it in selling some of the stakes in the five new companies?
Maffei: Under the old deal, we had 63% of the vote, but they were being voted by Mr. Diller. Under the new setup, we have 30% of the votes, but we will vote them ourselves immediately. And we will have board representation at all the spun companies and an opportunity to increase our stakes under certain circumstances.