Liberty Global, the international cable arm of John Malone’s media empire, is coming off a strong 2016 financial performance in Europe as profile in the content arena is rising.
Liberty Global’s European cable business, which includes the U.K.’s Virgin Media, delivered full-year earnings of $2 billion, compared to a loss of $1.1 billion in 2015. The European operations saw a gain of 946,000 subscribers, most of them broadband. The company saw its video subscriber losses in Europe drop by 31% year-over-year, to 276,900. Total revenue in Europe was up 2.5% for the year to $17.28 billion.
Liberty Global’s vast holdings in Europe and Latin America include Ireland’s Tv3 broadcast network, the Ziggo Sports channels in the Netherlands and the Formula-E racing franchise (Liberty Global’s cousin Liberty Media just bought the larger Formula One racing business).
Liberty Global also holds a 9.9% stake in the U.K.’s ITV and owns the U.K.-based production group All3Media in partnership with Discovery Communications. In 2015, Liberty Global also took a small stake in Lionsgate as part of Malone’s larger investment in the studio. Liberty Global president-CEO Mike Fries sits on the board of Lionsgate along with Malone and Discovery’s David Zaslav.
With its reach of 29 million subscribers in Europe and Latin America, Liberty Global is well positioned to help expand Lionsgate’s horizons in those regions, especially in the wake of Lionsgate’s acquisition last year of another Malone-controlled company, Starz.
Fries called the Lionsgate investment “a strategic opportunity” for his businesses. There are some projects afoot between Liberty Global and Lionsgate but he would not elaborate on specifics.
“Investing in original content is important for our on-demand platforms,” he said. “It’s not massive but we’ve got more than a toe into it.”
All3Media, meanwhile, has grown through acquisitions and higher demand for programming worldwide since Discovery and Liberty acquired the group in 2014.
“It’s going really well,” Fries said. “It’s perceived to be one of the more attractive destinations for really talented producers because of our federal model: you join up but you keep your own little studio hustling and bustling.”
For now, Liberty Global’s main operational focus is navigating the highly fragmented mobile communications services in the countries its serves as its cable systems seek to offer consumers the “convergence” play of video, telephone, data and wireless services.
Unlike the U.S., there are multiple wireless providers in each of the major European countries — a market that is in need of consolidation. Liberty Global in some markets has acquired wireless providers and in others has struck MVNO partnerships.
The assets that made Liberty Global the largest international cable operator were assembled during the previous decade in a whirlwind of buying and selling. But even after all of that consolidation, there’s still plenty of organic growth to mine, Fries said.
“We’re building out millions of new homes that don’t have access to our networks,” he said. “It’s almost a green field for growth.”