"Cable cowboy" John Malone goes on empire-building spree again- report
Billionaire John Malone, dubbed as the "cable cowboy" in Mark Robichaux's 2002 biography, is now building his empire once again, Bloomberg reported. Malone made his wealth in the 1980s and 1990s by assembling the biggest cable operator in the US.
Now, the firms he is backing have unveiled or are readying over $80 billion worth of acquisitions. This includes an offer by Liberty Media Corp to become the full owner of Sirius XM Holdings Inc, a satellite radio network, an expected offer for Time Warner Cable Inc by Charter Communications Inc and a possible deal by Liberty Global to acquire Ziggo, a Netherlands-based broadband provider.
Wunderlich Securities Inc Analyst Matt Harrigan said Malone is pouring money to meet new challenges, as consumers have been choosing online streaming services such as those offered by Netflix Inc and other rivals. Harrigan said the offers reveal that Malone is making a bet on digital media and high-speed broadband on a worldwide scale.
Harrigan told Bloomberg, "The complexity of the tech road map necessitates consolidation." He added that for Malone to augment the size of his firms and develop technology more quickly, the billionaire needs to have complete control of his companies.
Bloomberg data showed that if all the transactions succeed, the three firms will have spent more in acquisitions this year compared to the decade that ended last year. However, success is not really certain: The price of Sirius went up yesterday compared to the value of Liberty Media's offer, a sign that investors expect a higher offer. For its Time Warner Cable bid, Charter may also face competition from Comcast Corp and Cox Communications Inc, the report said.
However, Leo Hindery told Bloomberg Television that Malone could be making a mistake targeting cable asset acquisitions. Hindery, who worked with Malone as President and Chief and Executive Officer of Tele-Communications Inc, said "Owning a lot of cable systems does not mean much to me. The triple play is a fantasy. It is one wire."