Liberty will spin off its 50% stake in Discovery Communications and the entirety of its Ascent Media holdings into a new public company as Dr Malone shuffles his portfolio to boost shareholder value. The deal comes 1 year after Liberty announced plans to spin off overseas assets; it could either clear the way for the good Dr to take full ownership of Discovery or set the stage for another media conglomerate (e.g., News Corp, Viacom, Time Warner, Comcast) to buy him out. Based on its ’04 operating cash flow, the Discovery assets alone are worth $10bln-$15bln, assuming single-digit percentage growth in ’05 and a 15x-20x multiple. The transaction is expected to close in the spring; it will cede investors .05 share of Discovery Holding Co for each held series A and/or B share. The Doctor’s juking surprised the Street, but Smith Barney analyst Niraj Gupta said the structure "should unlock value for Liberty shareholders," since the company will use DHC to build and acquire programming assets. Gupta said DHC could be a clean way to get Cox and Advance/Newhouse to relinquish their respective 25% stakes in Discovery. Not everyone was pleased; S&P and Fitch cut Liberty’s unsecured debt to BB-plus, the highest junk rating. Earnings: Liberty said its 4Q net loss narrowed to $2mln, or break-even on a per-share basis, from $931mln, or 32 cents/share, YOY. Revenue rose to $2.35bln. Sales at QVC rose 16% to $1.8bln; Starz sales gained 5.5% to $248mln. Discovery’s annual revenue was up 19% to $2.4bln.

The Daily

Subscribe
Friday–December 13

FCC Launches Update to Broadband Health Map

The FCC updated its Mapping Broadband Health in America platform Friday to include new variables to better examine maternal health. Now, the platform allows users to visualize and survey

Read the Full Issue
The Skinny is delivered on Tuesday and focuses on the cable profession. You'll stay in the know on the headlines, topics and special issues you value most. Sign Up

Calendar

Apr 16
Cablefax 100 Awards Nominations Open November 13th, 2024.
Full Calendar

Jobs

Seeking an INDUSTRY JOB or hiring for one?
VIEW JOBS

In conjunction with our sister brand, Cynopsis, we are offering hiring managers a deep pool of media-savvy, skilled candidates at a range of experience levels and sectors. The result will be an even more robust industry job board, to help both employers and job seekers.

Contact Carley Ashley, [email protected], for more information about posting a job on the website and our Jobs newsletter, sent twice weekly to 85,000 media professionals.