That’s the way it sounded today when the Liberty Media chairman took a few questions from shareholders at the end of his company’s six-minute annual meeting. A union of Fox and Time Warner, he volunteered, “just raises all kinds of consolidation, monopsony, and market power issues for both [the Justice Department] and the FCC,” John Malone says. It would create “a powerful programming enterprise with lots of market power.” CEO Greg Maffai added that it would be “probably not great for the Liberty family” which includes the Atlanta Braves, Sirius XM, and 26% of Charter Communications.
But Malone generally likes mergers. Media “is a scale-driven industry [so] it’s going to always look for opportunities to consolidate.” The pressure to combine is particularly acute now because “we’re about half way through — maybe not even that — the digital revolution” and “at the beginning” of entertainment globalization. What’s more, wireless companies “are looking at [media] as a converging set of technologies.”
He especially likes Comcast’s planned purchase of Time Warner Cable — and the tack-on agreement to sell and swap systems with Charter. “My guess is the regulators will ultimately approve the deal,” Malone says. There’ll have to be “some horse trading on definition of net neutrality, and protection of independent suppliers. You could look at those as the same issue.” But he acknowledges that the arrangements could become “a little complicated by the pile-on effect” with AT&T’s deal to buy DirecTV, and possible proposals to unite Sprint with T-Mobile as well as Fox-Time Warner.
For now, Charter is “doing better than if bought the whole thing” — referring to Time Warner Cable. And if officials block Comcast, then Charter “is in a beautiful position to re-initiate discussions [with TWC]. But that’s not something we expect.”
As an aside, Malone noted that Liberty — which is famous for its complicated deals — is now “much more transparent than the Obama administration….Things go in cycles. We get simpler and we get more complicated.”