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May Debut for Liberty Interactive?

3/08/2006 9:16 AM Eastern

Liberty Media Corp. reported strong fourth-quarter results, fueled mainly by the performance of its QVC Inc. home shopping channel.

For the quarter, revenue at Liberty was up 13% to $2.45 billion, driven primarily by QVC, which reported a 14% revenue gain to $2.1 billion and operating cash flow of $469 million, a 14% increase.

At its Starz Entertainment Group LLC unit, revenue was flat at $247 million for the quarter and operating cash flow declined 37% to $29 million.

CEO Greg Maffei said plans are moving forward for a new tracking stock for Liberty’s technology assets -- Liberty Interactive -- which should be introduced in May. Liberty Interactive will include QVC, Provide Commerce Inc. and Liberty’s interests in InterActiveCorp and Expedia Inc.

Liberty’s remaining assets -- particularly Starz; OnCommand Corp.; True Point; WildBlue Communications Inc.; its stock holdings in several media companies, including News Corp.; and its interests in cable networks GSN and Court TV -- would remain with the old company, to be renamed Liberty Capital.

Maffei said on a conference call with analysts that although Liberty would like to monetize its News Corp. holdings -- it controls nearly 19% of News Corp.’s voting shares -- through an asset swap or other transaction, it is content for the moment to hold on to the shares.

Liberty surprised News Corp. late last year when it announced a deal to nearly double its voting stake in the media company from 9% to 17%. That voting stake -- second only to News Corp. chairman Rupert Murdoch’s and his family’s 30% voting interest -- forced News Corp. to initiate a poison pill that would make it difficult for an outside investor to purchase more than 15% of its voting stock.

Maffei said on the call that Liberty’s voting stake in News Corp. is approaching 19%, mainly the result of News Corp.’s aggressive share-repurchase program. As News Corp reduces the number of outstanding shares through buybacks, Liberty’s voting interest rises.

“The ultimate goal is to find a tax-efficient solution, tax-efficient asset,” Maffei said on the conference call. “There are a range of possibilities to which we could get to that solution. In the interim, we hold an asset that we like and we feel good about and, frankly, one that we might be able to exert more influence upon.”

March