John Malone Related Companies

[ValueMaven]

Started a position in Liberty Broadband today given the sharp pullback in Charter and Broadband over the past several months

[ElstonG]

New topic but I’m curious if anyone has looked closely at / has opinions on Malone/Maffei’s executive compensation approach especially pertaining to stock option grants, which seem heavily employed across entities (especially for Maffei). I know WEB has decried stock option grants under certain conditions (e.g., if priced unrealistically or without a carrying cost / retained-earnings factor) but I am not expert enough to gauge confidently whether the Liberty companies have structured these in a more tolerable / shareholder friendly way.

[Spekulatius]

Any one noticed that every Malone related stock is getting whacked recently:

LSXMA, LBRDA, WBD, LILA, LBTYA, LTRPA and probably more that I forgot.

 

Strange how they all move together in a high beta fashion (partly due to relatively high leverage of these entities).

[ValueMaven]

Yes - I've recently bought LBRDK 

[bizaro86]

7 hours ago, Spekulatius said:

Any one noticed that every Malone related stock is getting whacked recently:

LSXMA, LBRDA, WBD, LILA, LBTYA, LTRPA and probably more that I forgot.

 

Strange how they all move together in a high beta fashion (partly due to relatively high leverage of these entities).

Yes. I have had them on my watchlist for years and opened new positions in Broadband and SiriusXM, plus starters in Braves/Formula One.

 

I need to do some work on whether I like BATRA or MSGS - might do a half of each.

 

LibertyTrip has A LOT of leverage...

Edited May 10, 2022 by bizaro86

[Spekulatius]

@bizaro86 MSGS is not a Malone related company. It’s controlled by Dolan.

I own LBRDA and just a bit of WBD (starter). I think LBRDA, WBD and LSXMA are the most interesting from the bunch.

[bizaro86]

41 minutes ago, Spekulatius said:

@bizaro86 MSGS is not a Malone related company. It’s controlled by Dolan.

 

 

I know. I'm not buying Malone fanboy style, these just happen to be cheap. The MSGS comment was more that it has very similar drivers to BATRA, so I may not need/want to own both, if one is cheaper. Need to do more work on that.

[ValueMaven]

I took a modest loss in Sirius and swapped into Broadband about a week ago.  The buyback story for Broadband is a lot easier for me to understand + I think Charter is oversold.  NAV discount is basically -20%, and Charter continues to buyback stock aggressively which is a positive for Broadband which has to sell into it.  I like that they sold Skyhook in the quarter as well.  We shall see how it plays out. There is also a really interesting Liberty preferred which went from ~$29 to $25 during this whole selloff.  It's small, but is noncallable, and has a 7% yield.  From the old GCI ideas and is fairly illiquid but is also attractive IMHO if you like that type of stuff.  

[mjm]

11 hours ago, ValueMaven said:

There is also a really interesting Liberty preferred which went from ~$29 to $25 during this whole selloff.  It's small, but is noncallable, and has a 7% yield.  From the old GCI ideas and is fairly illiquid but is also attractive IMHO if you like that type of stuff.  

do you mind sharing the preferred?

[ValueMaven]

47 minutes ago, mjm said:

do you mind sharing the preferred?

 

LBRDP

[Spooky]

Just saw an insider filing that John Malone bought roughly $4.6M of Liberty Latin America Ltd. (LILA).

[weighingmachine]

Liberty Formula One - where Luxury meets streaming

 

https://streamingjungle.substack.com/p/liberty-formula-1-where-luxury-meets

[ElstonG]

Good critical POV / summary of the Liberty universe and its relative underperformance of late from a one time “believer”: https://yetanothervalueblog.substack.com/p/liberty-day-2022-its-time-for-a-change

[dcollon]

Thanks for posting the link.  

[Spekulatius]

On a high level, Malone complex companies tend to underperform in a higher interest rate/ tightening credit environment. The reason for this is that they generally operate at quite high leverage. That's my simpleton thinking.

 

The fact that the media business has been challenging as of late does not help either.

Edited November 16, 2022 by Spekulatius

[Dinar]

I think that he has been really bad at choosing successors and really good at paying them insane amounts.

[Cod Liver Oil]

Zaslav's comp alone should get Malone retroactively excised from the "Outsiders".

https://www.amazon.com/Outsiders-Unconventional-Radically-Rational-Blueprint/dp/1422162672

Malone's formula worked great for 10 or 15 years. It is obsolete now. Very few guys remain outstanding through several business cycles.

Drukenmiller and Buffett (maybe @dealraker?)  are a couple of the rare exceptions.

Edited November 17, 2022 by Cod Liver Oil

[Gregmal]

All great investors evolve. Malone has never evolved and for the most part, neither has the shareholder base. People who over focus on FCF accruing to equity without any awareness of context or overall EV and risk profile. 

[Spooky]

Few years of under performance ... could be time to buy. Looks like Burry has dipped his toes into some of the Malone complex.

[ValueMaven]

I only own Liberty Sirius - given the discount and possible catalysts.  

[Dalal.Holdings]

1 hour ago, Spekulatius said:

On a high level, Malone complex companies tend to underperform in a higher interest rate/ tightening credit environment. The reason for this is that they generally operate at quite high leverage. That's my simpleton thinking.

 

The fact that the media business has been challenging as of late does not help either.

They didn’t perform all that gloriously into low rates and loose policy thru last yr tho

[scorpioncapital]

I don't quite understand how over 5 year and max period on Google chart (2014) ,

LBRDA underperformed its underlying asset CHTR by so much. Is that even possible?

 

[Munger_Disciple]

1 hour ago, scorpioncapital said:

I don't quite understand how over 5 year and max period on Google chart (2014) ,

LBRDA underperformed its underlying asset CHTR by so much. Is that even possible?

 

 

Because LBRDA is not identical to CHTR (even today). LBRDA acquired GCI (Alaskan Cable Company) through a complex maneuver involving two steps: Formation of GCI-Liberty first and then merging GCI-Liberty into Liberty Broadband. The first step involved paying a premium to market price of GCI to form GCI-Liberty. 

[changegonnacome]

20 hours ago, Gregmal said:

All great investors evolve. Malone has never evolved and for the most part, neither has the shareholder base. People who over focus on FCF accruing to equity without any awareness of context or overall EV and risk profile. 

 

I've been guilty of this in the past - the first and most important question always is whether the enterprise has an improving, stable or deteriorating business fundamental future in front of it.........leverage amplifies whatever the answer is.......the mistake that can be made & therefore amplified in a Malone company is you make the wrong business analyst assessment.......a value trap is always a painful experience.......a levered value trap is torture.

[dcollon]

Liberty Media Corporation Announces Plan to Split off Atlanta Braves and Create New Liberty Live Tracking Stock Group
Thursday, November 17, 2022 12:00:00 PM (GMT)

Liberty Media Corporation (“Liberty Media”) (Nasdaq: LSXMA, LSXMB, LSXMK, BATRA, BATRK, FWONA, FWONK) today announced that its board of directors has authorized management to pursue a split-off (the “Split-Off”) of the Atlanta Braves and its associated real estate development project and the creation of a new Liberty Live Group tracking stock.

“We plan to split off the Atlanta Braves into an asset-backed stock to better highlight its strong value. Additionally, post Split-Off, we plan to recapitalize all of Liberty Media’s remaining common stock into three tracking stock groups,” said Greg Maffei, Liberty Media President and CEO. “These actions will provide greater investor choice and enable targeted investment and capital-raising through more focused currencies, while maintaining an optimal capital structure for Liberty Media and preserving optionality with respect to our subsidiary SiriusXM and our Live Nation stake.”

The Split-Off would be accomplished through the redemption of Liberty Media’s existing Liberty Braves common stock in exchange for common stock of a newly formed company to be called Atlanta Braves Holdings, Inc. (“Atlanta Braves Holdings”). Atlanta Braves Holdings would hold all of the businesses, assets and liabilities currently attributed to the Braves Group, including Braves Holdings, LLC, which is the direct or indirect owner and operator of the Atlanta Braves Major League Baseball Club, certain assets and liabilities associated with the Atlanta Braves’ stadium and mixed use development project, The Battery Atlanta, and corporate cash. In connection with the Split-Off, Liberty Media would redeem each outstanding share of its Series A, Series B and Series C Liberty Braves common stock for one share of the corresponding series of common stock of Atlanta Braves Holdings. As a result of the Split-Off, Liberty Media and Atlanta Braves Holdings would be separate publicly traded companies. It is expected that the intergroup interests in the Braves Group held by Liberty Media’s existing Liberty SiriusXM Group and Formula One Group would be settled and extinguished in connection with the Split-Off in a manner to be determined.

Following the completion of the Split-Off, Liberty Media would create a new third tracking stock group, the Liberty Live Group, through the reclassification of all of Liberty Media’s remaining common stock, which includes the Liberty SiriusXM Group and the Formula One Group (the “Reclassification”). In connection with the Reclassification:

• Outstanding shares of Liberty Media’s Series A, Series B and Series C Liberty SiriusXM common stock would be reclassified into shares of the corresponding series of both new Liberty SiriusXM tracking stock and Liberty Live tracking stock.
• Outstanding shares of Liberty Media’s Series A, Series B and Series C Liberty Formula One common stock would be reclassified into shares of the corresponding series of both new Liberty Formula One tracking stock and Liberty Live tracking stock.

The reclassification ratios for the creation of the new tracking stocks will be determined and announced at a later date.

Liberty Media intends to attribute its businesses, assets and liabilities among the new tracking stock groups as outlined below:

• New Liberty SiriusXM Group - its interest in Sirius XM Holdings Inc., corporate cash, Liberty Media’s 1.375% Cash Convertible Senior Notes due 2023 and related financial instruments, Liberty Media’s 2.125% SiriusXM Exchangeable Senior Debentures due 2048, Liberty Media’s 2.75% SiriusXM Exchangeable Senior Debentures due 2049 and margin loan obligations incurred by its wholly owned special purpose subsidiary, which are secured by shares of common stock of Sirius XM Holdings Inc., together with certain other assets and liabilities currently attributed to the Liberty SiriusXM Group.
• New Formula One Group - its interest in Formula 1, corporate cash, Liberty Media’s 1% FWONK Cash Convertible Notes due 2023 and Liberty Media’s 2.25% FWONK Convertible Senior Notes due 2027, together with certain other assets and liabilities currently attributed to the Formula One Group.
• Liberty Live Group - all of the businesses, assets and liabilities of Liberty Media other than those specifically attributed to the new Liberty SiriusXM Group or the new Formula One Group, including its interest in Live Nation Entertainment, Inc., corporate cash, certain public and private assets currently attributed to the Formula One Group, Liberty Media’s 0.50% Live Nation Exchangeable Senior Debentures due 2050, margin loan obligations incurred by its wholly owned special purpose subsidiary, which are secured by shares of common stock of Live Nation Entertainment, Inc., together with other assets as may be determined from time to time by Liberty Media.

Upon the effectiveness of the Reclassification, no group will initially have an intergroup interest in another group.

Liberty Media expects its new Liberty SiriusXM common stock, new Liberty Formula One common stock and new Liberty Live common stock to trade on the Nasdaq Global Select Market or, if necessary, to be quoted on the OTC Markets. Additional information will be available at a later date. Liberty Media does not expect a change to the ticker symbols of its Liberty SiriusXM and Liberty Formula One common stock, and its new Series A, Series B and Series C Liberty Live common stock is expected to trade under the ticker symbols LLYVA, LLYVB and LLYVK, respectively.

The Split-Off and the Reclassification will be subject to various conditions. Both transactions will be conditioned on, among other things, certain requisite approvals of the holders of Liberty Media’s common stock and the receipt of opinions of tax counsel. In addition, the Split-Off will be conditioned on the requisite approval of Major League Baseball and the receipt of an IRS ruling. In addition, the Reclassification is dependent and conditioned on the approval and completion of the Split-Off, and will not be implemented unless the Split-Off is completed; however, the Split-Off is not dependent upon the approval of the Reclassification and may be implemented even if the Reclassification is not approved. Each of the Split-Off and the Reclassification is intended to be tax-free to stockholders of Liberty Media. Subject to the satisfaction of the conditions, Liberty Media expects to complete the Split-Off and the Reclassification in the first half of 2023.

Liberty Media’s President and CEO, Greg Maffei, will discuss this announcement at its previously scheduled annual Investor Meeting on Thursday, November 17, 2022 with presentations beginning at approximately 9:00am E.S.T.

The Investor Meeting will be held in New York, NY and is open to shareholders, research analysts and press. Registration and livestream information is available on the Liberty Media website and at http://timesevents.nytimes.com/LibertyMedia2022InvestorDay. Please note that all in-person attendees must be fully vaccinated against COVID-19 and show proof upon arrival. An archive of the webcast of the Investor Meeting and a presentation detailing the Reclassification and Split-Off will also be available on https://www.libertymedia.com/investors/news-events/ir-calendar after appropriate filings have been made with the SEC.