Maffei: Traditional Pay TV Model Will Survive

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New York - Liberty Media CEO Greg Maffei said traditional pay TV companies will survive the latest threat to their business models - over-the-top video - mainly because they have weathered similar storms before.
At the UBS Global Media & Entertainment conference here Tuesday, Maffei said that cable and satellite companies have stood up to threats from telcos and countless other competitors and the same should hold true for online content.
"This is just one more transition," Maffei said, adding that cable, satellite and telco video business models still have a "lot of life."
Maffei pointed to its Liberty Starz unit, which under the helm of CEO Chris Albrecht has played the role as a creator of new content and distributor of other companies' programming. Starz has concentrated more on original programming under Albrecht, and Maffei said that is continuing, adding the premium network has had several "fruitful discussions" with international players to develop new programming.
Maffei said a planned spin of the Liberty Starz unit will likely be delayed because of pending litigation. A handful of bondholders have opposed the spin and a trial date has been set for February. While Liberty is confident the spin will ultimately take place, that probably won't happen until the May or June time frame, Maffei said.
Liberty Starz was created in 2009 after the premium channel and several other assets were carved out of Liberty Entertainment. Part of Liberty Media's ongoing strategy to simplify its structure and turn its tracking stocks into asset-based securities, the Liberty Starz split has also fueled speculation that the company could be used as an acquisitions vehicle.
Maffei said that while Liberty Starz will be opportunistic, there are other ways to increase the unit's value outside of an acquisitions binge. He pointed to partnerships with MSOs and off-balance sheet vehicles to finance original programming initiatives as examples.
Maffei also seemed to downplay talk that Liberty could snap up HSN Inc., the home shopping channel in which it owns a one-third interest. Combining HSN with its QVC home shopping network has been the subject of speculation for years, but has been quashed because of the gap between Liberty's valuation of the asset and HSN's stock price. While that gap has narrowed after a somewhat disappointing third quarter (from which HSN has largely recovered) Maffei said there might be better uses for Liberty's money.
Liberty has about $3 billion of cash on hand, and while an HSN buy is one potential use of those funds, it has to be weighed against other uses like stock repurchases.
"In many cases, it's easier to buy your own stock," Maffei said.

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