King of Cable: a match for Murdoch?

By Kate Bulkley

John Malone cuts an imposing figure, both physically – he is a barrel-chested man with a deep, penetrating voice – and in the cut and thrust of business, where he has proved himself a tough and opportunistic deal-maker.

In the process, Malone, 71, has made himself a billionaire and the largest single land-owner in the US (he surpassed Ted Turner in 2011) with properties in five states stretching from Colorado – where his company Liberty Media has its corporate HQ – to Maine, a long-time summer retreat.

He loves sailing but hates flying, and avoids getting on planes wherever possible. He is considered a ‘cerebral’ businessman and a hallmark of a Malone deal is that it is well planned and always tax-efficient.

The ‘King of Cable’ became a moniker after he spun off the largest US cable company TCI to AT&T in 1999 for $54bn (£34bn), and his recent moves to consolidate control in US satellite radio operator Sirius XM bear a classic Malone stamp: the plan is for Liberty to spin off its Sirius stake using a structure that will distribute shares to its investors while avoiding taxes on the separation.

Malone’s other nickname is Darth Vader, harking back to when he was head of TCI and demanded equity positions in the cable channels seeking carriage deals. He has come out on top from partnerships with Barry Diller’s InterActiveCorp (IAC), and the spin-off of a 50% stake in cable channel operator Discovery Communications, and Rupert Murdoch has discovered that Malone can be a formidable opponent.

He covertly built up an 18% stake in News Corp, which he then exchanged with Murdoch for a controlling stake in DirecTV, the US satellite pay-TV business.

Malone and Murdoch have a grudging respect for one another, and despite the war between Virgin Media and BSkyB cooling in recent times, the Liberty deal will again put him in direct competition with Murdoch’s BSkyB. We have a history of competition with Sky and we look forward to this