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LMCA - Liberty Media


ItsAValueTrap

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There is always something happening with Malone's entities:

 

"Liberty Global is going head to head with Vodafone to buy Spain’s largest cable operator as the pair intensify their battle to snap up big chunks of Europe’s broadband infrastructure.

 

A bidding war for Ono, which analysts value at up to €7bn including debt, would pit the UK’s biggest telecoms company by market value against John Malone’s cable company for the second time in as many years. Vodafone is already in talks with the private equity owners of the Spanish group, which is also considering a flotation later this year. "

 

http://www.ft.com/intl/cms/s/0/2261ca62-8846-11e3-85a2-00144feab7de.html#axzz2rnA62cXW

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Report: Liberty, Discovery in Talks for Formula 1 Stake

 

"Liberty Media (LMCA) and Discovery Communications (DISCA) are in talks to acquire a minority stake in global racing circuit Formula One, according to a New York Post report on Monday.

 

Media mogul John Malone is working to make a deal happen through Liberty Media and Liberty Global (LBTYA), hoping to buy as much as 49% of Formula One from private equity firm CVC Capital.

 

The report said talks between Liberty, Discovery and CVC Capital are in an early stage and could still fall apart.

 

A Discovery spokesperson declined to comment. Representatives of Liberty Media and CVC didn’t respond to inquiries from FOX Business.

 

A Formula One deal would put Malone’s cable entities in a position to better control rights fees for sports content. Liberty Media owns U.K. cable giant Virgin Media and holds a 27% stake in Charter Communications (CHTR), which is in a fight to buy larger rival Time Warner Cable (TWC).

 

Liberty Media is also the owner of Major League Baseball’s Atlanta Braves and controls 29% of the voting power in Discovery...."

 

http://www.foxbusiness.com/industries/2014/02/03/report-liberty-discovery-in-talks-for-formula-1-stake/

 

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"Liberty Media owns U.K. cable giant Virgin Media"

 

Is the above correct?

 

I thought Liberty Global acquired (and owns) UK Virgin Media and Malone owns a stake in Liberty Global directly (not via Liberty Media).

 

You're right, it's not LMCA. It happens all the time that journalists mix up the various Liberty companies.

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Liberty Media is also the owner of Major League Baseball’s Atlanta Braves and controls 29% of the voting power in Discovery...."

 

The above is news to me.  I checked LMCA's 'Asset List' on their IR and there's no note of this.  Perhaps they were referring to Malone's personal holdings of DISC.B.

 

Either way Malone/Maffei are quite busy in 2014:

- LINTA splits into LDCA\B and QVCA\B

- LVNTA spins off TripAdvisor

- CHTR bid

- SIRI acqusition

- Ziggo acqusition

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Liberty Media is also the owner of Major League Baseball’s Atlanta Braves and controls 29% of the voting power in Discovery...."

 

The above is news to me.  I checked LMCA's 'Asset List' on their IR and there's no note of this.  Perhaps they were referring to Malone's personal holdings of DISC.B.

 

Either way Malone/Maffei are quite busy in 2014:

- LINTA splits into LDCA\B and QVCA\B

- LVNTA spins off TripAdvisor

- CHTR bid

- SIRI acqusition

- Ziggo acqusition

 

Yep, Malone personally has 29.2% of the voting power, not Liberty.

 

http://www.sec.gov/Archives/edgar/data/1437107/000119312513138773/d498913ddef14a.htm

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Sirius results:

 

http://investor.siriusxm.com/releasedetail.cfm?ReleaseID=823023

 

- 2013 Record Revenue of $3.8 Billion, Up 12%

- Net Income of $377 Million in 2013

- Adjusted EBITDA Climbs 27% in 2013 to $1.17 Billion

- 2013 Free Cash Flow of $927 Million, Up 31%

- Fourth Quarter Revenue Exceeds $1 Billion, Adjusted EBITDA Climbs 41%

 

The conference call has a little bit of info about how they're going in the connected car and are planning a kind of hybrid sat/LTE system, with potentially some international expansion on the cellular side as OEMs start to go there. Early days, but nice potential there.

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In Sirius conf call:

 

"Our $3.6 billion of total debt includes $500 million of deep in the money converts that mature in December of this year. Our total forward leverage is just 2.6x based on our EBITDA guidance and just 2.25x if you exclude the converts. Interest coverage was 6x in the fourth quarter.

 

For years, we have told investors that we do not intend to be an investment grade rated company and that over time investors should expect to see us take our leverage target up. We did just that in early January, announcing an increase in our target leverage from 3.5x to 4.5x.

 

We now have over $2.4 billion of borrowing capacity under our target leverage ratio, and when combined with free cash flow, that will approach $1.1 billion in 2014. We have total liquidity of $3.5 billion to pursue acquisitions and return capital to shareholders. That’s roughly 16% of our current equity capitalization."

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Maybe Rutledge will do some wheeling and dealing and snipe some of the assets from the new company.  (He did this in the past with Bresnan.)

 

It's definitely not Malone's style to overpay for assets.  They wouldn't like to pay a really low price for TWC but... I hope they will make lemonade from lemons.

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Maybe Rutledge will do some wheeling and dealing and snipe some of the assets from the new company.  (He did this in the past with Bresnan.)

 

It's definitely not Malone's style to overpay for assets.  They wouldn't like to pay a really low price for TWC but... I hope they will make lemonade from lemons.

 

I can't imagine that CMCSA is going to get away with this deal without having to make some significant divestitures.  Certainly will be room there for CHTR to pick those up.

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Maybe Rutledge will do some wheeling and dealing and snipe some of the assets from the new company.  (He did this in the past with Bresnan.)

 

It's definitely not Malone's style to overpay for assets.  They wouldn't like to pay a really low price for TWC but... I hope they will make lemonade from lemons.

 

I can't imagine that CMCSA is going to get away with this deal without having to make some significant divestitures.  Certainly will be room there for CHTR to pick those up.

 

So, Malone will get the industry consolidation that he has been calling for, he may be able to buy assets from a forced seller, a $45B deal will mean that LMCA stake is now worth $450M. What the next move for Charter? Cox?

 

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http://www.ncta.com/industry-data/item/217

 

Table mixes cable, telco, and DTH, but after TWC, next largest cable MSOs are Cox, Cablevision and Brighthouse, but none of them offer as many subs as TWC.  I think the last thing Malone wants to do is go on a rollup spree of smaller MSOs, but that's what he may have to do.

 

I also think it quite likely that the FCC or DOJ may block the combination on anticompetitive grounds.  Certainly if they allow it, even with divestitures, they would be setting themselves up for DISH and Directv to merge.  Comcast says they will divest 3 million subs so net add will be 8 million subs from TWC.

 

This is going to be incredibly fascinating to watch.

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Never a dull moment. I really expected Malone & Rutledge to find a way to make it work.

 

Now if nothing else, they can use the market's disappointment to do some buybacks and maybe increase their stake in Charter if they still think things will work out well (they always said they didn't need acquisitions for Charter to be a success, but there are other targets).

 

Fascinating time for the industry, for sure.

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Maybe Rutledge will do some wheeling and dealing and snipe some of the assets from the new company.  (He did this in the past with Bresnan.)

 

It's definitely not Malone's style to overpay for assets.  They wouldn't like to pay a really low price for TWC but... I hope they will make lemonade from lemons.

 

I can't imagine that CMCSA is going to get away with this deal without having to make some significant divestitures.  Certainly will be room there for CHTR to pick those up.

 

So, Malone will get the industry consolidation that he has been calling for, he may be able to buy assets from a forced seller, a $45B deal will mean that LMCA stake is now worth $450M. What the next move for Charter? Cox?

 

The Comcast/Time Warner Cable deal makes a lot of sense because of their service footprints.  IMO, Malone probably figured that Comcast would eventually come in and take the prize, and since he definitely is calling for consolidation, I don't think he's that sad about this deal.  Wouldn't be surprised if he gets to buy some assets in a way that's a lot more easily digestible. 

 

And then I'm sort of the opinion that LMCA will eventually just own CMCSK.  It may be 10 years down the road, but I think that could very well happen.

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