Malone's Liberty Media is dropping hints it may focus on the ticketing company as its payoff in Barry Diller's proposed IAC breakup
If media moguls know one thing about cable billionaire John Malone, it's that he usually gets what he wants. What does Malone want these days? The top executive at Malone's Liberty Media says it could be Ticketmaster, which last year sold a staggering $7.1 billion worth of seats to events.
And Malone may just get it: Ticketmaster is one of several assets that fellow mogul and IAC/InterActiveCorp. (IACI) Chief Executive Barry Diller may be forced to sell to Liberty (LCAPA) to complete the IAC breakup he announced on Nov. 5 (BusinessWeek.com, 11/6/07).
Liberty CEO Gregory Maffei says his company has been unable to swing a deal for Home Shopping Network—which Liberty would like to merge with its QVC discount shopping business—because IAC has set the price too high. At the 35th annual UBS Global Media & Communications Conference in New York on Dec. 3, Maffei mused that Liberty may now focus on Ticketmaster, the dominant name in ticket sales. Maffei said Ticketmaster "has a great business" that would mesh well with Liberty's entertainment assets, which will expand substantially in the coming weeks if Malone's deal to buy the DirecTV (DTV) satellite service wins federal regulatory approval as expected.
Tensions Between the Executives
Malone has unusual sway over Diller and the deal Diller wants to do: Liberty Media, which has spent years collecting an assortment of media assets, owns a 24% stake in IAC and a 55% voting interest, according to Liberty. And tensions between the two executives have grown since the 1990s, when Malone convinced Diller to run IAC by offering him control of Liberty's majority vote. Despite that arrangement, Malone retains veto power over major company decisions Diller might make.
Now Diller wants to free himself of Malone by breaking apart IAC, which owns such choice properties as Ask.com and Lendingtree. To get Malone to step out of the way and allow Diller to spin off the assets he no longer wants, the IAC chief seems eager to sell Malone at least one of those assets. (Diller wants to hang onto Ask.com's online search and several entertainment content properties, such as Collegehumor.com.)
Ticketmaster, which earned $264 million in 2006, has seen its business come under attack of late. The biggest hit may come from concert promoter LiveNation (LYV), which plans to launch its own ticketing business—taking an estimated 14% of Ticketmaster's business with it.
Ticketmaster's European Tour?
Ticketmaster executives have said they anticipate making up the lost LiveNation business with acquisitions and an aggressive push overseas. "Even with its LiveNation problem, Ticketmaster has a great business," says Maffei. "And it would be a nice fit with DirecTV, which distributes a lot of programming that has to do with live events."
Will it happen? John Malone is full of surprises, including lightning-fast decisions and abrupt reversals of plans. Maffei says Ticketmaster talks haven't begun with Diller, who has yet to tell Malone which assets he wants to offer his largest shareholder. Not that it much matters: You can be sure Malone already has some ideas of his own.