Mogul John Malone Says Viacom Assets are 'Undervalued' Because of Ongoing Turmoil
08 July 2016 - 2:41AM
Dow Jones News
By Joe Flint
Sun Valley, IDAHO -- Cable mogul John Malone said Thursday that
beleaguered media giant Viacom Inc. has undervalued cable assets
and indicated he has no interest in investing in its Paramount
Pictures movie studio, which is trying to sell a minority
stake.
Mr. Malone, who as chairman of Liberty Media Corp. is one of
media's best-known deal-makers -- he orchestrated the recent merger
of Charter Communications Inc. and Time Warner Inc. -- is bullish
on television, but the movie business makes him nervous.
"Theatrical is a tough business and you can run hot and cold,"
he told reporters at Allen & Co.'s annual gathering of business
leaders in Sun Valley, Idaho. As for the opportunity to invest in
Paramount, "that would not be where I would go if it was my
decision," he said.
However, other Viacom properties such as its cable networks are
under-appreciated, he said. "They've got some great assets and
right at the moment because of the turmoil they're substantially
undervalued."
The turmoil he is referring to is the struggle for control of
Viacom, as the health of its controlling shareholder, 93-year-old
Sumner Redstone, declines. Viacom Inc. Chairman Philippe Dauman and
Mr. Redstone's daughter, Shari Redstone, are on opposite sides of a
legal battle that will determine the makeup of Viacom's board and
who will oversee Mr. Redstone's assets after he dies or is declared
incapacitated.
The drama has led to speculation that Viacom, which split with
CBS Corp. in 2006, might recombine with the broadcaster, uniting
Mr. Redstone's assets back under one roof. Mr. Malone declined to
speculate on that but did say CBS Chief Executive Leslie Moonves
"would do a terrific job if they wanted to go that way."
Meanwhile, Mr. Malone said the planned union of the movie and
television production company Lions Gate Entertainment Corp. and
the pay-TV channel Starz will give the combined firm more leverage
when it comes to making and acquiring content.
"This gives them the opportunity to be bigger, be a little more
aggressive in investing in content," said Mr. Malone, who is on the
board of Lionsgate and is Starz's largest voting shareholder. He
said both companies currently are "sub-scale in the space."
A vocal advocate of industry consolidation, both in distribution
and content, Mr. Malone said there are still more deals to be done
but not necessarily huge ones. As cable, satellite and telecom
companies combine, it is important for their suppliers, programmers
and content producers, to also have size and leverage, he says.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
July 07, 2016 12:26 ET (16:26 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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