The big topic on day one of the Dow Jones/Nielsen Media & Money conference among major media execs was the possible NBC Universal (NYSE: GE) sale to Comcast (NSDQ: CMCSA). Mediaweek editor Mike Burgi put the question to Greg Maffei, president & CEO of Liberty Media (NSDQ: LINTA), who agreed with the earlier assessment from News Corp.’s Chase Carey at this morning’s session, which was that it could be a very good deal for Comcast. “There are challenges, and [Comcast CEO] Brian Roberts would be paying a fairly high multiple, but he would be getting high multiples for its assets. One of the smart things about this deal for Comcast is that it’s a good hedge against rising [programming] costs. I suspect there will be enormous challenges from the regulators, given Comcast’s size. It will be fascinating to see what what sort restrictions are placed on Comcast as the process plays out, if it does happen, of course.”
The discussion then moved on to Sirius XM (NSDQ: SIRI). The satellite radio company was teetering on the brink of bankruptcy before Liberty’s rescue via a $530 million loan back in February. But as its recent Q3 earnings and outlook showed, Sirius is poised for a rebound. That’s something that seemed very unlikely a few months ago.
So what did Maffei see back then, when Sirius was looking so vulnerable? Maffei: “We love Sirius, it’s our kind of business, it has a monopoly position after the merger, 18 million subscribers, and has a cash flow subscription model. We have almost no ad-based business. It’s our fear of the general ad market. The trends for advertising are not positive. Back to Sirius, when we saw the merger occur and saw they could not refinance, we offered our help. In terms of subscribers, looking at the cable companies, Sirius would be number three in terms of paying customers.”
On Time Warner spinning off AOL: “One can argue whether content creation and distribution work in general, but it never worked at Time Warner (NYSE: TWX). Will see if [AOL CEO] Tim Armstrong can turn it around. Certainly, this will be very good for Time Warner.” But Time Warner still has other problems, beyond AOL, Maffei said. He focused on the publishing business at Time Inc. “We all remember when Fortune was a half inch thick, now it’s a pamphlet. It’s a shame, because it was a great magazine. But like advertising, the trends aren’t good for publishing. In the end, 80 percent of Time Warner’s profits will be cable, with a modest amount will be film. Even less will come from publishing.”
One last thought was reserved for IAC: “The company is largely a pile of cash today. Some of its businesses are performing okay, but many are under-performing. It’s just a big pile of cash right now and that’s it.”