This year promises to be especially busy for Liberty Media as the tight-lipped company and its chairman John Malone snap up and spin off companies at a dizzying pace.
Denver-based Liberty’s been doing that forever, walking the line between a holding company with a basket of assets and a media and entertainment conglom. Malone’s moves are usually dictated by whatever deal gets favorable tax treatment, which makes him something of an enigma to Hollywood. But he’s made investors rich and a fascinated Wall Street watches as he moves in on SiriusXM and Live Nation while preparing to unload Starz.
On Thursday, the FCC granted approval for a so-called “de jure” transfer of control of SiriusXM Satellite Radio to Liberty.
Liberty, which owns close to 50% of Sirius, said it expects to complete the transfer within 60 days. The news comes several days after Liberty boosted its stake in Live Nation to 26.4%, acquiring an additional 1.7 million shares from Irving Azoff, who resigned as chairman of the concert promotion and ticketing giant.
In August, Liberty announced plans to split off Starz into an independent publicly traded company.
Liberty’s other assets include the Atlanta Braves baseball team, TruePosition, Barnes & Noble, and minority equity investments in Time Warner and Viacom. Liberty Global,with cable assets around the world, and Liberty Interactive, which owns QVC, are part of the empire.
Liberty lent SiriusXM $500 million in 2009 to help it stave off bankruptcy in a deal that gave it 40% of the company. It continued to acquire shares. Malone fell out with Sirius’ chief executive Mel Karmazin last March when Liberty asked the FCC to grant it “de jure” control even though it did not own a majority of the stock.
Karmazin announced his resignation in October and left last month.
Malone may spin off Liberty’s stake in Sirius and execute what’s called a Reverse Morris Trust, distributing shares to stockholders while avoiding paying taxes on the split. Some pundits speculate that an even more complex transaction could involve combining Liberty’s stakes in Sirius and Live Nation and spinning that off. Liberty hasn’t committed but kept its options open.
The FCC ruling was announced after the market close and Sirius shares popped up by more than 3% in late trading.
Meanwhile, Live Nation’s Azoff, a powerful manager and longtime music exec, said he preferred being an entrepreneur and is taking a number of his longtime clients with him.
He’ll stay in the family, in a manner of speaking since he’s been named to the newly constituted board of Starz, which Liberty announced in August it would split into a separate company. It will be a likely acquisition target worth an estimated $3 billion, although there are few immediately obvious buyers.
Starz CEO Chris Albrecht has had some success with original series such as “Spartacus” but has still struggled to put Starz on the same pay TV plane as HBO and Showtime. The network took a hit last month when Netflix inked a landmark long-term output deal with Walt Disney that will replace the Mouse’s current pact with Starz starting with theatrical pics released in 2016.
“There is always the possibility somebody else could do better with the business than we can,” said Liberty CEO Greg Maffei said of the Starz spinoff at a recent media conference.