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Liberty Media Loses Interest in Sirius/XM; Turns Focus to Consolidating U.S. Cable Industry Instead

Phillip Dampier March 18, 2014 Competition, Consumer News, Liberty/UPC No Comments
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Liberty Media is building an acquisition fund.

John Malone’s Liberty Media has lost interest in acquiring full ownership of satellite radio provider Sirius/XM as it turns its attention to re-entering the U.S. cable industry.

Malone’s company has a 53% controlling interest in the satellite radio service but had announced its intention to acquire 100% of the $23 billion venture. Analysts predicted Liberty planned to use Sirius/XM as an integral asset to help acquire financing to buy Time Warner Cable. But after Comcast suddenly announced its intention to acquire its fellow cable operator, Malone has decided he needed a bigger, more stable presence in the cable industry.

Liberty Media will create two new tracking stock groups for its interests — Liberty Media Group and Liberty Broadband Group. Liberty Media will hold Sirius/XM and a range of Liberty-controlled content companies. Liberty Broadband will be the new home for Liberty’s 25% ownership interest in Charter Communications as well as its future cable-related transactions.

Liberty Broadband Group is expected to start with more than $3 billion it can spend to acquire other cable operators, but analysts expect that amount to grow exponentially as investors seek financial opportunities from Malone’s efforts to consolidate the U.S. cable industry into three or four companies. Malone will need a large acquisition fund to target operators including Cox Communications, Cablevision, SuddenLink, Cable ONE, Mediacom, and other smaller companies.

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