Liberty Media CEO: ‘Tough’ to Take Minority Stake in Major Studio

Liberty Media CEO Greg Maffei has cast doubt on Liberty’s interest in pursuing the minority stake in Paramount Pictures that Viacom recently put on the auction block.

Maffei, speaking Monday at the Deutsche Bank Media Internet and Telecom conference in Palm Beach, Fla., was asked a hypothetical question from the audience by investor Mario Gabelli about Liberty’s interest if Sony Corp. CEO Kaz Hirai was to offer up a stake in the conglom’s studio unit. Paramount was not mentioned by name, but Maffei’s answer would seem to apply as much to the Melrose lot as well as to Sony Pictures.

“It’s tough to buy a minority interest in a private company,” Maffei said. Maffei noted that the film arena in particular is “a perverse business” that has been dominated by the same six companies for 75 years.

“We’re not really in the content play today. We’re not really in that game. I think being a minority partner would be tough for any one of (the major studios),” he said.

Maffei’s answer is notable as companies affiliated with Liberty chairman John Malone have been mentioned as potential suitors for Paramount. Last month Viacom announced it would see an investor for a minority stake in the storied studio, a move prompted by investor pressure, from Gabelli and others, on CEO Philippe Dauman to take steps to revive Viacom and Paramount’s fortunes.

Maffei responded on behalf of Liberty but he also noted earlier during the conversation about his general appetite for content assets that he could not speak for Discovery Communications, in which Malone has a major stake, or Lionsgate, which is now 10% owed by Malone and his affiliates. Starz, the pay TV programmer controlled by Malone, and Lionsgate are engaged in deal conversations at present.

In public forums Malone has talked about the potential for a roll-up of content assets to create production entities with greater global scale, and the need for cable operators to bulk up against the competitive threat from well-heeled tech giants such as Google and Amazon. Liberty has been a driving force of cable consolidation with the pending merger of Charter Communications, in which it owns a 26% stake, Time Warner Cable and Bright House Networks.

Pressed for specifics about the interest in content among Malone-affiliated entities, Maffei suggested that any activity on that front would flow through Starz (and presumably Lionsgate should a deal between those two come to pass). But he left a door open for an enlarged Charter to be in the mix too.

“I can’t say there’s no chance Charter isn’t ever in the content business in some form or other,” he said.

However, Maffei made it clear that the Liberty-branded entities are unlikely to directly go on a shopping spree for traditional TV and film content.

“The odds are that the Liberty entities participate in some way, other than through Starz, in some big content consolidation — I don’t see the easy path for that and I don’t see the obvious path for that other than through Starz,” he said.


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