Malone Chats It Up At Sun Valley

Liberty Media may be snapping up Live Nation stock faster than one can say “Sirius XM,” but chairman John Malone’s remarks to reporters July 11 at the annual Sun Valley, Idaho, tech and media conference included a backhanded critique of the concert giant and hints as to his acquisition philosophy.

Liberty has increased its Live Nation stake in recent months to more than one-quarter of the concert giant’s outstanding shares, and has the right to take that stake to 35 percent.

By announcing in May it was acquiring some 9.5 million LYV shares, Liberty set tongues to wagging about what it all means. For example: Will Liberty make a move to acquire Live Nation and take it private?

Coincidentally, the day after Liberty completed the acquisition of those shares, Malone was cornered by reporters to dish on rival Mel Karmazin of Sirius XM at the Sun Valley confab. And dish he did – as well as drop a noteworthy quote about Live Nation.

When asked his thoughts on Live Nation by a gaggle of reporters outside the conference bar (apparently, the only place reporters are allowed), Malone suggested Live Nation wasn’t one of his favorite companies.
“You’re talking about rock musicians; this is not my kind of thing,” he was quoted saying by the New York Times. “I don’t like a business where the assets go up and down on elevators. I like them to be fixed, hung on poles or up in space going around.”

The latter was an obvious reference to Sirius XM, shares of which Liberty is also buying up at an even more frenzied pace. Liberty is expected to soon take majority control of Sirius XM, of which Karmazin is chairman, and spin off its own stake to shareholders.

The idea of acquiring Sirius XM just to spin it off apparently is one of tax advantages for shareholders, and Malone’s remarks might hold a clue for Live Nation’s future should the Liberty juggernaut take control of LYV.

“I don’t believe in conglomerates,” Malone said, according to the Times. “There’s no question that eventually Sirius will be an independent company. The question is in what time frame and under what circumstances.”

Malone told the gathered press he liked to have “separate independent companies run independently with independent boards” and “not some fruit salad of companies.” That philosophy, if consistent, could be taken into consideration in light of any LYV buyout.

But no matter what form a Liberty takeover of Sirius might take, Liberty would spin off the company in the most tax-beneficial way possible, the Times reports.

“No, we don’t want to pay taxes,” Malone said.

The Sun Valley conference, thrown annually for the last 30 years by investment firm Allen & Co., has grown into an event rivaled only by the upstart TED conference as a gathering of moguls and power players in media, tech, business and politics.

It’s also been cited as the birthplace of blockbuster deals, including the $19.4 billion acquisition of ABC/Cap Cities by Disney in 1994 and, more recently, Comcast’s tie-up of NBC Universal.