US ‘Cable Cowboy’ John Malone begins succession planning

February 26, 2014 Leave a comment

February 19, 2014 3:35 am

US ‘Cable Cowboy’ John Malone begins succession planning

By Matthew Garrahan in Los Angeles

John Malone, the US billionaire dubbed the “Cable Cowboy”, has begun planning his succession at Discovery Communications and Liberty Global by giving their chief executives right of first refusal if he decides to sell his stakes in the media companies.

Both companies have dual class share structures that give Mr Malone control. In separate regulatory filings, the billionaire gave David Zaslav, chief executive of Discovery, and Michael Fries, chief executive of Liberty Global, the option to buy his voting rights – or match a final offer from another potential buyer – should he choose to sell.

Mr Malone said he was “thrilled” to have reached agreements with Mr Zaslav and Mr Fries. “Nothing is changing right now,” he said. “I have no plans to transfer any of my voting shares and plan on staying actively involved in both Liberty Global and Discovery Communications.”

“But, in the event that I do in the future decide to pursue the sale of my voting position, I am excited about providing these two strong executives. . . with a path toward acquiring that stake.”

Mr Malone controls one of the largest collection of media assets and is one of the sector’s most prolific dealmakers. Liberty Media, which is focused on US media companies, has in the past few years spun off the Starz cable channel, taken control of Sirius XM satellite radio and acquired a 27 per cent of Charter Communications.

Mr Malone intended Charter to be the vehicle for the purchase of Time Warner Cable but was outbid last week by Comcast in a deal that valued TWC at about $45bn.

Liberty Global, which is focused on Europe, has spent close to $30bn in the past two years acquiring cable companies such as Ziggo

in the Netherlands and Virgin Media in the UK.

Discovery Communications, meanwhile, owns cable channels such as TLC, Animal Planet, and OWN, its joint venture with Oprah Winfrey.

Mr Zaslav could make about $110m this year after agreeing a new contract with Discovery that will keep him with the media group until 2019.

Under his deal, Mr Zaslav will receive 1m performance-based restricted stock units that could boost his total earnings to $110m, although the final total could fluctuate with the performance of Discovery shares.

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