CHTR Charter Communications Inc New

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)

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