Malone Focuses on Libertys Future


Denver -- Much of Liberty Media Group's initial growth
will come from a $35 billion portfolio of assets that's growing at up to 30 percent
per year, said Tele-Communications Inc. chairman and CEO John Malone, who will run the new

Nevertheless, with $5.5 billion in AT&T Corp's
cash, and $3.5 billion expected from the divestiture of TCI's stake in the Sprint PCS
partnership, the challenge will be to find "careful ways" to invest that money.

"The real question is: Given the liquidity that this
AT&T transaction gives Liberty, how do we add to this portfolio carefully? A lot of
Liberty's future has to do with what I would call financial engineering -- very
careful tax planning, and utilizing liquidity and access to liquidity to boost up return
on equity. I don't think that you can expect us to go out and buy something big with
cash," Malone said at a press briefing following the special TCI shareholders'
meeting here last Wednesday.

Instead, Liberty will have "a venture-capital appetite
for appropriate, technologically based opportunities," represented by "new
companies that we think have the opportunity to get large."

"Liberty is very interested in investing in the things
that we already have that are already successful and watching them grow," he said.

Liberty will be looking for the kind of growth that it
enjoyed with Teleport Communications Group, an alternative-access provider that it sold to
AT&T last year for $11 billion, and with @Home Network, which today has a market
capitalization of $21 billion.

"So the little ones can get big, too," Malone
said. "You just have to have a nurturing kind of approach and patience."

He conceded, however, that there are no guarantees.

"You've got to kiss a lot of frogs to find to
prince," he said.

In the meantime, both AT&T and Liberty will enjoy
special benefits under the merger. Specifically, if Liberty loses money, thereby reducing
AT&T's tax liability, the parent company will compensate it.

"So you have a sort of safety net under your dumb
mistakes," Malone said.