Malone to Roberts: Help Ops, Sell QVC

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New York– Liberty Media Corp. chairman John Malone put his own spin on the cable industry's highly visible spats with programmers, with ESPN's 20% license-fee increase serving as the flashpoint.

"There will be some compression on growth rates achieved through affiliate fees," he predicted. "It's going to be different for different players. If Disney needs 20% a year compound growth rates on its affiliate fees for ESPN, there is going to be a war."

That war could lead to government intervention, Malone said. "The most likely outcome would be some provision that says if a channel costs more than 50 cents, it's got to be a la carte. End of story; end of Disney."

But, he added: "Getting government to resolve inter-corporate disputes may have a tactical advantage, but it's a strategic disaster."

Malone said he wants Comcast CEO Brian Roberts to step up and force change. Of course, his advice would also benefit Malone's dream of buying control of QVC Inc. from Roberts.

"If Brian sends a big signal, if he sells the most profitable cable network in the world, QVC, rather than buy it, one of the strategic reasons for him to do that is to get rid of the horizontal/vertical rules that apply to him. If he does that you can also look for him to get out of E! [Entertainment]. Because then he's clean. Then he can beat the crap out of everybody on rates and he won't have any antitrust issues related to him," Malone said.

"Somebody has to say no to the underlying sports machine," Malone added. "Unless something is done to break that chain, either by Congress or by a courageous Brian Roberts, you're going to continue to see this happen.

"We'll be waiting and watching Brian defending the industry and being the champion here."

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