AllThingsD » John Malone

Liberty Says Nook Inspired B&N Bid

Jessica E. Vascellaro and Nat Worden — Tue, 24 May 2011 07:00:45 +0000

Liberty Media Corp. executives laid out their rationale for their surprise bid for Barnes & Noble Inc., touting the potential of the bookseller’s Nook e-reader and the vast network of retail stores it can use to promote it.

Liberty Media Chairman John Malone and chief executive Greg Maffei told investors Monday that the potential for the Nook platform to become the e-book application of choice for consumers on all tablet devices built on Google Inc.’s Android operating system helped motivate the company’s bid for the ailing bookstore chain.

Read the rest of this post on the original site »

Liberty Media Bids for Barnes & Noble

Joan E. Solsman — Thu, 19 May 2011 23:57:36 +0000

Barnes & Noble Inc. said that Liberty Media Corp. has offered to buy the bookseller in a deal valuing it at about $1 billion.

Barnes & Noble shares were up 20 percent in after-hours trading Thursday on the news, matching the $17-a-share offer price from John Malone’s media empire.

The bookseller has been reviewing strategic alternatives, including a sale, since last summer.

The offer for the country’s largest bookstore chain represents a bold foray for Liberty into a new segment of entertainment products and signifies the growing significance of digital and online business in the book industry.

Read the rest of this post on the original site »

Barry Diller and John Malone Complete Their Divorce

Peter Kafka — Thu, 02 Dec 2010 13:40:42 +0000

Barry Diller and John Malone, who have been tied together for 17 years, are officially split up, for good: Malone’s Liberty Media is abandoning its majority stake in Diller’s IAC holding company and taking $220 million along with IAC’s Evite.com and Gift.com units, as parting gifts. Meanwhile Diller himself is making a smaller break with IAC by stepping down as CEO, but will remain as chairman. More details from Shira Ovide.

Malone Is Fired Up by Cable and Ready to Buy

Jessica E. Vascellaro — Mon, 12 Jul 2010 21:03:07 +0000

Liberty Media Chairman John Malone is fired up about cable again, believing its high speeds will give it an edge over satellite as consumers devour more entertainment digitally.

The compulsive deal maker says he is looking for new investments, especially overseas, in cable, which he helped build over more than two decades as chief executive of Tele-Communications Inc. before it was sold to AT&T (T) in 1999.

At the same time, the proud libertarian, who has feuded with regulators throughout his career, says he’s concerned the Federal Communications Commission could turn cable into a “dumb pipe” by limiting cable companies’ ability to bundle services like Internet and television. (An FCC spokeswoman says that “unbundling of services is off the table,” and any FCC changes would “encourage rather than inhibit investment.”)

More broadly, Mr. Malone engineered his way through the recession, merging Liberty’s stake in DirecTV (DTV) back into the satellite company, among other moves.

Read the rest of this post on the original site

In Sun Valley, Media Chiefs Fret Over Economy

Jessica E. Vascellaro — Thu, 08 Jul 2010 22:11:48 +0000

Media and technology executives and investors are sounding new alarms bells about the economy, worried it could wipe out recent growth.

In an interview Thursday morning at the Allen & Co. conference in Sun Valley, WPP LLC chief executive Martin Sorrell cited the possible widening of Europe’s economic troubles along with the coming expiration of some tax cuts for business as among the fears of the media, entertainment and technology executives attending the annual event. “People feel that things are uncertain,” he said.

Liberty Media Chairman John Malone echoed the feeling, telling a group of reporters Thursday morning that he believes the high levels of debt held by the U.S. and other governments could hamper growth for years to come. Gordon Crawford, a well-known media and technology investor with Capital Research & Management Group, said earlier in an interview that he believes the U.S. is in for “several years of very modest growth.”

Read the rest of this post on the original site

Who's Going to Pay for Online Content? A) A Few of You B) Barely Anyone C) You're Already Paying

Peter Kafka — Mon, 16 Nov 2009 15:05:47 +0000

The new conventional wisdom is that sooner or later, consumers will have to start paying for some of the stuff they currently get for free on the Web.

But will they actually pay up? Here, the conventional wisdom is not so helpful. Nor are studies predicting consumer behavior. To wit:

Nearly 50 percent of U.S. Web users are willing to pay for online news, says the Boston Consulting Group.
Not a chance, says Forrester (FORR): Try 20 percent.

For what it’s worth, my money’s on the Forrester number, or one that’s even lower. My gut says people love consuming news, but only in the broadest sense–Obama doesn’t really Twitter! What was Belichick thinking?–and that sort of stuff, which appeals to a very large audience, will always be free, and you’ll get it from Google (GOOG) or something like Yahoo (YHOO). Which leaves you with a small audience willing to pay for everything else.

But! We should note that people are indeed paying for “content” right now. In fact, they’re paying for a lot of it: $115 a month, up seven percent from last year, says NPD Group. The breakdown:

As of August 2009, 81 percent of U.S. households subscribed to a television service (satellite TV, basic/premium cable, or fiber-optic television service). A similar percentage of households (76 percent) paid for Internet subscriptions. Seventeen percent subscribed to an online music service or satellite radio; and 14 percent subscribed to online gaming subscription services.

More traditional forms of entertainment subscriptions, however, did not fare so well. The number of people subscribing to newspapers fell by 2 percentage points to reach 29 percent in August 2009. Forty-one percent of consumers subscribed to magazines this year, compared to 43 percent who did so last year.

According to NPD, an influx of new smartphone owners has led to an increase in mobile data-plan subscriptions: 9 percent of U.S. consumers had mobile data subscriptions this year, versus just 6 percent last year. Fourteen percent of consumers subscribed to a home-video subscription service, like Netflix, this year, which is 2 percentage points higher than last year.

Ah, see? Problem solved: If you want Americans to pony up for stuff on the Web, just link it to something they’re already paying for, like their cable or Internet subscription.

This is what smart guys like John Malone have been talking about for a while, and it’s also the core of the strategy behind the Time Warner (TWX)/Comcast (CMCSA)/everyone else “TV Everywhere” gambit. But it’s also what many people have been trying to do for a very long time–ask the music industry–with limited success.

Liberty Media Jumps 10 Percent as Q2 Sales, Ebitda Beat

Tiernan Ray — Fri, 07 Aug 2009 15:12:49 +0000

Shares of John Malone’s Liberty Media Interactive (LINTA), owner of “QVC,” are up sharply this morning after the company beat Q2 expectations for revenue and operating profit.

Revenue fell, year over year, to $1.9 billion, the company reported, yielding adjusted Ebitda of $412 million. Still, that was ahead of the $1.834 billion and $345 million average estimate of analysts.

Revenue at QVC, which is most of the business, fell 4 percent to $1.7 billion, though that was an improvement from prior quarters, said QVC president and CEO Mike George.

Read the rest of this post on the original site

Does John Malone Want To Own AOL?

Eric Savitz — Fri, 26 Jun 2009 17:46:47 +0000

Does Liberty Media (LINTA) want to own AOL?

CNBC’s David Faber raised the question this morning at the tail end of a long interview with Liberty Media CEO Greg Maffei. And Maffei indicated that Liberty, the media empire controlled by billionaire investor John Malone, actually does have some interest in the Time Warner (TWX) unit, which is currently on track to be spun off as a separate company via an IPO.

Read the rest of this post on the original site

Liberty Media Chairman John Malone: The Full D7 Session

Kara Swisher — Fri, 19 Jun 2009 04:58:22 +0000

As many already know, John Malone has been a cable legend since he first ran Tele-Communications Inc. back in the early 1970s.

Besides being there at the founding of many channels, the Liberty Media (LCAPA) chairman’s influence put most of them on the map and his forceful business skills willed cable into becoming a key consumer medium for entertainment and news.

Malone talked about that experience onstage at the seventh D: All Thing Digital conference and how it mirrors what is going on now as more content is being distributed on the Internet. And, more importantly, he discussed how it might or might not be paid for.

You should listen, because Malone is a genuine media pioneer who could teach Web players a thing or two.

Here’s the full D7 video of the session:

[ See post to watch video ]

Liberty Media Chairman John Malone: The Full D7 Session

Kara Swisher — Wed, 17 Jun 2009 08:16:42 +0000

As many already know, John Malone has been a cable legend since he first ran Tele-Communications Inc. back in the early 1970s.

You should listen, because Malone is a genuine media pioneer who could teach Web players a thing or two.

Here’s the full D7 video of the session:

[ See post to watch video ]

In Case You Missed It, Here's the Print Version of D7, Um, Online!

Kara Swisher — Wed, 03 Jun 2009 09:53:06 +0000

Yesterday, The Wall Street Journal did a special Technology Report section, made up of excerpts of selected interviews from the seventh D: All Things Digital conference.

It includes sessions with Microsoft (MSFT) CEO Steve Ballmer ringing in Bing; Yahoo (YHOO) CEO Carol Bartz trying to find a reason to curse at BoomTown; Roger McNamee and Jon Rubinstein of Palm (PALM) introing the Pre; Twitter Co-Founders Biz Stone and Evan Williams saying “we do not know” was the microblogging service’s mantra; entrepreneur Mark Cuban talking smack about the Internet; cable legend and Liberty Media (LMDIA) Chairman John Malone cracking wise; and NBC Universal (GE) head Jeff Zucker doing the Hulu.

As the event’s hosts and interviewers, Walt Mossberg and I also did a mini-essay about the event, in which we continued to jest about various goofy names that digital eras had been given.

As we wrote:

“Before the seventh D: All Things Digital conference, which took place last week in Carlsbad, Calif., we declared—with our tongues firmly planted in our cheeks—that Web 2.0 was over and Web 3.0 had begun.

While we were poking fun at Silicon Valley’s incessant need to stick a hyped-up catchphrase on each and every development, the use of such jargon was actually important, because we think that the digital sector is now moving full bore into an entirely new cycle of profound change.”

We decided to focus in on smart phones and the mobile platform as critically important in the next era, although what we were talking about was the complete integration of computing into every part of our lives in a way that is seamless, ubiquitous and, ideally, dead simple.

As we also noted in the essay:

“From using easy gestures to grab any piece of information from the Web to having powerful computers in the palm of your hand to being able to quickly dip into complex social networks to getting real-time information from across the globe as it happens, this is an era when computing could become as integrated and invisible as electricity and just as important.”

So read all about online and in print (if you saved a copy) and you can also watch video highlights on this site too.

But, best of all, All Things Digital be posting the full video of all the sessions on this site soon.

D7 Video: Liberty Media's John Malone

Beth Callaghan — Wed, 27 May 2009 19:14:36 +0000

John Malone has been one of the original pioneers of television, ever since he was running TCI and the notion of 500 TV channels was revolutionary. He takes the stage at D7 to talk to Walt Mossberg about paid content and the future of television as it converges with the Internet.

[ See post to watch video ]

Liberty Media's John Malone: Video Will Be Everywhere, but Someone's Got to Pay for It

Peter Kafka — Wed, 27 May 2009 18:48:27 +0000

Remember when the notion of 500 TV channels was a new idea, and a big one? John Malone, chairman of Liberty Media (LINTA), does. He’s the one who floated it, way back in 1992, when he was running TCI, which at the time was the biggest and most powerful player in the cable business. Since then, Malone has moved in and out of several companies, often via dizzyingly complicated investment structures, but has always stayed connected to TV in some form. Which makes him a timely guest to have on the D: All Things Digital stage this year, when convergence–the true marriage of TV and the Internet–has become a reality and we move from 500 channels to an infinite number.

Session Highlights

[ See post to watch video ]

Live Blog

Walt Mossberg introduces Malone and his history and portfolio. Question: In five, ten years, are people going to be using the word “television”?
Malone: In five years old guys like me will still call it television, but it will come from anywhere, in many formats, via many distribution channels. Anything anywhere in increasing quality and quantity and decreasing costs. That’s the trend.
Walt: We’re used to the idea of shows, linear programming, on television sets. But younger people aren’t spending money on cable or satellite. The first thing they have to have is Internet, and they watch video on laptops. That’s a big change.
Malone: From a business perspective, the challenge for those of us in the distribution business is to deliver over multiple channels. So cable providers are trying to increase speed, add voice, add playback options, experimenting with Slingbox, trying to evolve with digital technologies. If you’re prudent as an investor, you’re trying to play all of these fields. The idea of programming linear channels has already broken down. By and large, most broadcasters don’t view broadcast as core anymore. They’re all moving to cable networks and their dual income streams (ads plus subscription). All of these media need to evolve as technology evolves.

Walt: The music business started falling apart when the album fell apart–unbundling. What’s the impact of that on video? Malone: For starters, things like live sports that can’t be watched on delay, become more important. “The big event, that’s heavily promoted, and can attract a big audience.” The economic bets are increasingly going to the big event, and it’s stealing the oxygen from the room, relative to tonnage. That’s having a big effect on other broadcast programming.
Walt: So starting something like a new “Seinfeld” is that much harder. Malone: Yes, because audience is ever-fragmented, and it’s harder to get their attention. First law of physics: Big bubbles get bigger and smaller ones disappear.
Walt: So who are the big bubbles? Malone: Sports. DirectTV just paid big dollars for its NFL contract. In terms of people’s appetites to watch entertainment on HD screens, it continues to grow.
Walt points out that MLB.com is really good. Malone. “Thank you. We own the Braves.”
Walt: “You own a lot of things.” Malone agrees.
Walt: Why doesn’t anyone offer me, through satellite or cable, a “real” Internet experience when it comes to TV, where I can get what I want, on demand? The DVRs they offer don’t cut it. Why can’t I buy a service where I turn it on and it’s like the Internet, where I get whatever I want? So it’s all Hulu, all the time, but with everybody fed into it, and with all the content?
Malone: “It’s this nasty little thing called bandwidth,” and no one has the capacity to give everyone everything at the same time. Yet. “It’s getting there.” Comcast (CMCSA) advertises thousands of simultaneous titles. Where the technology has been most heavily invested in, you’re starting to get a taste of it.
Walt: But you think that will happen? What happens to traditional programmers in New York or LA?

Malone: Monetizing is hard. Advertising may not do it. Hulu has ads but they’re not significant. How do you spend enough money to produce high-quality programming with advertising?
Walt: But you figured out how to get people to pay for content, when you pioneered cable TV.
Malone: Yes. It was a huge, titanic fight. We needed a law change to sell what had been free TV. So we bundled the “transport” charge with the content. That was the key.
Malone starts explaining the history of cable TV, from broadcast to Turner’s early satellite stuff to HBO. [If you're interested, I think this is a well-written (and opinionated) history]. Back to the future: The concern is that if it’s off the Internet, then psychologically, it’s free. That’s a big jump.
Malone: Here’s two efforts where I tried to get people to pay for content. I helped created @Home. The initial suggestion was to differentiate high speed vs. low speed by charging for some content. We proposed this to Gerry Levin at Time Warner. Couldn’t get it done, and we sold to AT&T, and the rest is history. Second: We suggested to broadcasters that they shouldn’t give away HD when that came in, but to bundle it into subscriptions. That didn’t go over either. Retransmission consent is changing some of that. Don’t know if that will be enough to save CBS (CBS).
Malone: We got people to pay for stuff by tying communication with content. If you can introduce incrementally, that say, 4G wireless service comes with these three things that you can only get with that, maybe that can work. I think it’s a very interesting watershed.
Malone points out that Liberty’s Discovery shows are not available on the Web–”they only tease it.” That’s very deliberate. There are other models of getting people to pay for stuff online–Bloomberg can do it by charging a very small audience a lot of money. People are OK paying for things they’re used to paying for. People will pay for access to NFL games on TV, and I think they’ll pay on the Web.
Malone: The question you have to ask yourself: Is an aggregator going to do that? Or as a consumer, will I have to have lots of relationships with lots of people?
Malone: You would love to be the aggregator. Cable would love to be. Hulu would love to be. Walt: Will you be in that competition? Malone: “If I live long enough, sure.”
Malone: We tried this with Vongo–Web movie distribution–not very successfully. We couldn’t get a broad enough control of rights. Movie rights are split between Showtime, HBO and us. No one has been able to get enough access to make that work yet.
Walt: What’s up this concept of “windowing”? Why can’t we get rid of this? Why can’t I watch the new Star Trek movie on my TV right now? I’d pay for it?
Malone: One reason is fear of piracy. Also the recognition that the appetite for the public in terms of willingness to pay goes through these windows.

Walt: I know the reasons for it historically, but it makes no sense today.
Malone: “A lot of it has to do with training the public, and the public doesn’t change its behavior quickly.” Devices are great, and they’re sexy. But systems and architectures and mindsets take time to change.
Q&A What is the future of local TV broadcasting? Malone: I asked Rupert Murdoch (old partner/rival) the same question today about local newspapers. My knee-jerk reaction was that the government has done it. Of course my reaction is to blame lots of things on the government. They should have allowed papers and TV stations to combine. Clearly there’s a need for local news and a demand for local advertising. The question is combining these in a way that’s economically viable. We’re studying that in a couple of local markets. More broadly, what’s the role of localism? Will all advertising go national? Will all content go national? I really don’t have an answer. Barry Diller has been trying to build out CitySearch for a long time, and it’s a real struggle for him. He’s about break-even on it, I don’t want to give away any secrets (again, Diller is a former partner/rival). I know that at Discovery, we would not produce anything that didn’t have global appeal, and couldn’t be translated into 87 languages.
Question: If Apple released an HD TV next month with the ability to create iPhone-like apps for people like Discovery, would that be appealing to you? Malone: It’s a chicken-and-egg question. A question of scale. How do you dare risk alienating your existing distribution infrastructure? That’s the problem with Zulu–I mean Hulu. It’s very experimental.
Malone: Cable industry has traditionally been too close, and too reliant on proprietary technology, and that’s been a problem. One of the reasons you’ve seen a digital explosion has been open-technology platforms.
Question: What about an iTunes-style unbundling for video? Malone: Yup, what we call a la carte. The reality is that 99 percent of channels are very inexpensive for the distributor. They’re basically giveaways. That’s the way the business evolved. Advertising is important because access to all those people is important for advertisers. Walt: Why can’t I buy the channels I want? Malone: The money you would save would be de minimus. Also, the very expensive services, like ESPN, have way too much leverage. No distributor wants to live without ESPN because they might risk losing 15 to 20 percent of their base.
Walt: So blame Bob Iger? Malone: The guys who don’t have leverage don’t charge very much. The ones who do have leverage won’t let you go a la carte.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.

Welcome to Lucky D7: Still Gambling on the Digital Future

Kara Swisher — Mon, 04 May 2009 07:26:10 +0000

Incredibly, this is the seventh year of the D: All Things Digital conference.

We feel very lucky to get here, especially in the midst of what our own site’s Digital Daily scribe, John Paczkowski, has so perfectly dubbed the “econalypse.”

Ironically, Walt Mossberg and I planned to launch the very first conference in the middle of the last major downturn for tech, in 2001. But, in the carnage of the Web 1.0 meltdown, we actually held off for two years, with our first D gathering taking place in 2003.

It’s been a real winning streak since then for D, due in large part to our great speakers–such as Microsoft (MSFT) icon Bill Gates and Apple (AAPL) legend Steve Jobs.

Both have been onstage many times over the years, including a historic interview the pair of tech titans did together in 2007 at D5.

Other amazing speakers have included: Howard Stringer of Sony (SNE), Barry Diller of InterActiveCorp (IACI), legendary director George Lucas, Time Warner (TWX) CEO Jeff Bewkes, Jeff Bezos of Amazon (AMZN), former eBay (EBAY) CEO Meg Whitman, News Corp. (NWS) head Rupert Murdoch, Microsoft head Steve Ballmer, Walt Disney (DIS) honcho Bob Iger, Bobby Kotick of Activision Blizzard (ATVI), CBS (CBS) CEO Les Moonves, Democratic and Republican pols like former Vice President Al Gore and Sen. John McCain, all the leadership of Google (GOOG) and many, many more.

We have had a lot of great moments onstage with all these tech and media players over the years, to be sure, with interviews ranging from the funny to the sublime to the truly disastrous.

But, like the digital industry and the innovation our conference focuses on, we also like to lean forward to try to figure out what the Next Big Thing is around the corner, whether it comes from Silicon Valley or not.

That’s why we’re kicking off our conference on May 26 with two of the founders of Twitter–Biz Stone and Evan Williams–who are riding high on tech’s latest hot thing, which might turn out to be either a rocket ship or a shooting star.

They’ll be followed up over the next two days by a plethora of interesting players, from the leaders of several major mobile companies to content execs hit hard by fast-moving digital forces to a new Internet leader like Yahoo (YHOO) CEO Carol Bartz, who is trying to turn around one of the Web’s great icons from its more recent lackluster path.

And, as we always do, we will be featuring a spate of demos too, trying to see if we can unearth that next next thing.

In the past, the D stage has seen the debut of start-up products like Sling Media’s Slingbox, Aliph’s Jawbone and Pure Digital’s Flip, all of which have gone onto glory. And also some, like Palm’s Foleo, which did not.

While not everyone can attend D, our crack staff is committed to bringing all the action from this year’s conference to readers of the All Things Digital site via up-to-the-minute blogs, photos, videos, tweets, digs and more. We’ll also, as soon as we can, post the videos of each of the onstage sessions, in their entirety.

Until it all kicks off, here is the list of speakers, below, in alphabetical order, who will be appearing at 2009′s D7 conference:

Irving Azoff | CEO of Ticketmaster Entertainment (TKTM)

Mitchell Baker | Chairman of Mozilla

Steve Ballmer | CEO of Microsoft

Carol Bartz | CEO of Yahoo

Mark Cuban | Chairman of HDNet and Owner of the Dallas Mavericks, Landmark Theaters and Magnolia Pictures

Eve Ensler | Playwright and Founder of V-Day

Arianna Huffington | Editor-in-Chief of the Huffington Post

Olli-Pekka Kallasvuo | CEO of Nokia (NOK)

Mike Lazaridis | Co-CEO of Research In Motion (RIMM)

John Lilly | CEO of Mozilla

John Malone | Chairman of Liberty Media Corporation (LCAPA)

Roger McNamee | Partner, Elevation Partners

Jon Miller | Chief Digital Officer of News Corp.

Jon Rubinstein | Executive Chairman, Palm (PALM)

Randall Stephenson | CEO of AT&T (T)

Biz Stone | Co-founder of Twitter

Owen Van Natta | CEO of MySpace

Katharine Weymouth | Publisher of the Washington Post (WPO)

Evan Williams | Co-founder and CEO of Twitter

Jeff Zucker | CEO of NBC Universal (GE)

Welcome to Lucky D7: Still Gambling on the Digital Future

Kara Swisher — Mon, 04 May 2009 07:15:55 +0000

Incredibly, this is the seventh year of the D: All Things Digital conference.

We feel very lucky to get here, especially in the midst of what our own site’s Digital Daily scribe, John Paczkowski, has so perfectly dubbed the “econalypse.”

It’s been a real winning streak since then for D, due in large part to our great speakers–such as Microsoft (MSFT) icon Bill Gates and Apple (AAPL) legend Steve Jobs.

Both have been onstage many times over the years, including a historic interview the pair of tech titans did together in 2007 at D5.

We have had a lot of great moments onstage with all these tech and media players over the years, to be sure, with interviews ranging from the funny to the sublime to the truly disastrous.

And, as we always do, we will be featuring a spate of demos too, trying to see if we can unearth that next next thing.

Until it all kicks off, here is the list of speakers, below, in alphabetical order, who will be appearing at 2009′s D7 conference:

Irving Azoff | CEO of Ticketmaster Entertainment (TKTM)

Mitchell Baker | Chairman of Mozilla

Steve Ballmer | CEO of Microsoft

Carol Bartz | CEO of Yahoo

Mark Cuban | Chairman of HDNet and Owner of the Dallas Mavericks, Landmark Theaters and Magnolia Pictures

Eve Ensler | Playwright and Founder of V-Day

Arianna Huffington | Editor-in-Chief of the Huffington Post

Olli-Pekka Kallasvuo | CEO of Nokia (NOK)

Mike Lazaridis | Co-CEO of Research In Motion (RIMM)

John Lilly | CEO of Mozilla

John Malone | Chairman of Liberty Media Corporation (LCAPA)

Roger McNamee | Partner, Elevation Partners

Jon Miller | Chief Digital Officer of News Corp.

Jon Rubinstein | Executive Chairman, Palm (PALM)

Randall Stephenson | CEO of AT&T (T)

Biz Stone | Co-founder of Twitter

Owen Van Natta | CEO of MySpace

Katharine Weymouth | Publisher of the Washington Post (WPO)

Evan Williams | Co-founder and CEO of Twitter

Jeff Zucker | CEO of NBC Universal (GE)

Sirius Founder: You're 10 Years Too Late, Karmazin

John Paczkowski — Mon, 16 Mar 2009 20:36:36 +0000

Is it too late for Sirius XM? CEO Mel Karmazin and John Malone, whose Liberty Media (LINTA) just tossed the foundering satellite radio outfit a $530 million lifeline, clearly don’t believe so. So do the company’s long-suffering investors who continue to stand by it, though their faith has been sorely shaken.

But the same cannot be said for Martine Rothblatt, the entrepreneur who founded Sirius (SIRI) nearly 20 years ago. She feels Sirius’s chances for real success may have died years ago–dealt a mortal blow by the FCC, which delayed its launch, depriving it of the competitive advantage it might have had over MP3 players like the iPod and later free Internet radio services.

“There has been a huge growth in terrestrial alternatives,” Rothblatt told Fortune. “As we move from third-generation to fourth-generation cellular, there’s going to be ever more bandwidth available to distribute content totally via terrestrial cellular infrastructure. And that will leave fewer and fewer unique market attributes to satellite radio. Technologies have their ideal times and places, and in my opinion the better time for satellite radio was 10 years ago.”

So much for that first-mover advantage…

A grim assessment for Sirius, which had just seemed to be getting an edge on its daunting troubles. But Rothblatt has a point. Internet radio is gaining traction and once cellular networks evolve to the point where they can deliver it to cars and other devices, how can satellite compete? Howard Stern’s going to retire sooner or later…

PREVIOUSLY:

Sirius Founder: You're 10 Years Too Late, Karmazin

John Paczkowski — Mon, 16 Mar 2009 20:36:36 +0000

So much for that first-mover advantage…

PREVIOUSLY:

Why So Sirius?

John Paczkowski — Tue, 17 Feb 2009 22:25:01 +0000

[ See post to watch video ]

Sirius: Sorry, Charlie

John Paczkowski — Tue, 17 Feb 2009 14:09:46 +0000

Looks like Sirius XM can shelve that bankruptcy filing it’s been preparing these past few weeks–for the time being, anyway. This morning, the struggling satellite radio company announced an 11th-hour deal with John Malone’s Liberty Media that will allow it to meet a Feb. 17 debt deadline that might otherwise have forced the company into Chapter 11 bankruptcy protection. Under its terms, Liberty will provide Sirius (SIRI) with $530 million in loans, a portion of which will be used to repay $171.6 million of its maturing convertible notes, due today. In return, Liberty (LINTA) will receive 12.5 million shares of Sirius XM preferred stock and a couple of seats on Sirius XM’s board.

Not the greatest of terms. Still, Sirius CEO Mel Karmazin has managed to save the company from bankruptcy and from satellite mogul Charlie Ergen without accepting a change in control for the company. And the deal is not subject to the approval of the Federal Communications Commission.

“This agreement enables Sirius XM to continue to develop the opportunities first outlined in the merger of Sirius and XM,” said Sirius CEO Mel Karmazin. “By strengthening our capital structure and enhancing our financial flexibility, this investment allows us to continue providing the great content and innovative programming our subscribers know and love.”

At 20 cents, Sirius shares are up an astonishing 85.89 percent on news of the deal.

PREVIOUSLY:

Call Me Mel "Save-My-Own-Keister" Karmazin

John Paczkowski — Fri, 13 Feb 2009 15:49:06 +0000

Sirius XM (SIRI) is ready to seek bankruptcy protection. The company has warned investors that it’s prepared to file Chapter 11. It has hired bankruptcy and restructuring advisers. And it has filled out the necessary paperwork. But it may never file it.

“People familiar with the situation” tell The Wall Street Journal that Sirius CEO Mel Karmazin and satellite mogul Charlie Ergen are moving closer to an accord that would save the struggling satellite radio outfit from having to file Chapter 11. Apparently, Ergen has agreed to allow Karmazin to keep his job if he agrees to a deal, and that’s been concession enough to keep him at the negotiating table, though he continues to pursue an alternative, and perhaps fantastical, deal with Liberty Media (LINTA).

PREVIOUSLY:

Call Me Mel "Save-My-Own-Keister" Karmazin

John Paczkowski — Fri, 13 Feb 2009 15:49:06 +0000

PREVIOUSLY:

Liberty Seriously Considering Sirius?

John Paczkowski — Thu, 12 Feb 2009 21:28:17 +0000

[ See post to watch video ]

Sirius-EchoStar-Liberty: Ménage-à-Blah

John Paczkowski — Thu, 12 Feb 2009 20:16:56 +0000

As entertaining as news of a Sirius XM-EchoStar-Liberty Media three-way might be, research houses don’t appear to be giving it much credence. Already a few have issued reports dubious of the idea of Liberty accepting the white knight role in this debacle.

In a note to investors this morning, Collins Stewart analyst Thomas Eagan described the possibility of Liberty acquiring or even investing in the struggling satellite radio concern as “highly doubtful.” Explaining his skepticism, Eagan notes, “We do not believe that Liberty initiated the dialogue with [Sirius]. Additionally, we believe [DirecTV] management does not want [Sirius] combined with its operations. [DirecTV] certainly does not need it. Their operations lead the industry.”

Over at Barclays Capital, James M. Ratcliffe and Vijay Jayant are equally skeptical of an alliance between Sirius (SIRI) Liberty (LINTA). “Liberty involvement is more likely an effort by Sirius XM to attract a competing bidder, in our view–we don’t believe the company is fundamentally interested in becoming involved in the satellite radio business,” they wrote, adding that a Sirius bankruptcy is still a distinct possibility. “Chapter 11 would allow the restructuring of above-market OEM revenue share contracts and branded programming contracts, improving operating cash flows,” they explained. “On the other hand, it would result in aggressive competition among the various capital stakeholders and create a significant management distraction for as much as eighteen months.”

For Sirius, bankruptcy may be a more attractive option than cutting a deal with EchoStar’s (SATS) Ergen, but that’s not really saying much. Anyway, Sirius has about a week to decide between the two.

PREVIOUSLY:

Sirius: Give Me Liberty or Give Me Ergen

John Paczkowski — Thu, 12 Feb 2009 13:44:01 +0000

The Sirius XM fiasco is fast becoming high drama. Hoping to avoid bankruptcy and fend off an unsolicited takeover attempt from satellite mogul Charlie Ergen’s EchoStar, which has been acquiring its debt, Sirius has approached Liberty Media about a possible transaction. “People briefed on the negotiations” say talks between the two companies are advanced, but it’s not yet clear how much Liberty would be willing to invest in Sirius and whether it’s even interested in taking control of the company.

Like EchoStar (SATS), Liberty Media’s interest in Sirius (SIRI) revolves around the company’s physical assets–satellite and terrestrial repeaters, towers that bolster satellite radio services with Liberty’s DirectTV (DTV) satellite television services. Said Stanford Group analyst Fred Moran: “All of these companies are satellite-delivered media. If you can cross-market, cross-promote and intertwine services between satellite video and satellite audio, you could strengthen your competitive position.”

Question is, is Liberty Media (LINTA) interested in such a thing and is it willing to repay Sirius XM’s debts and buy out the company’s existing shareholders to do it? If it’s not, Sirius may well be forced into bankruptcy, which company officials reportedly claim is preferable to inking a deal with Ergen and EchoStar. Seems Sirius CEO Mel Karmazin can’t bear the thought of giving up control of the company to Ergen.

Sirius shares are trading higher this morning on the news after being viciously beaten down Wednesday by reports that the satellite radio company is mulling a Chapter 11 bankruptcy filing.

PREVIOUSLY:

John Malone Quietly Dumps IAC Shares

Shira Ovide — Wed, 31 Dec 2008 23:11:55 +0000

Why has John Malone been dumping his shares of IAC/InterActiveCorp in the past two weeks?

The company controlled by cable industry pioneer Mr. Malone in recent weeks has sold roughly $17.5 million worth of IAC stock, including a 193,000 share sale reported Tuesday. Mr. Malone’s Liberty Media Corp. is the majority shareholder in IAC, the Internet conglomerate run by Barry Diller.

The recent slate of sales raises questions about whether Mr. Malone is losing confidence in his IAC investment, or simply has found a better use for the cash. Representatives for IAC and Liberty declined to comment Tuesday.

Read the rest of this post