NEW YORK (Reuters) - Liberty Media Corp Chairman John Malone on Friday said few opportunities exist to buy media companies right now, even with stock prices badly depressed across much of the industry.
The media mogul and well-known dealmaker said one reason is the credit crunch, which has put the breaks on dealmaking. What’s more, the presence of private equity and controlling families in the media business mean low stock prices don’t necessarily open the door to dealmaking.
“Certainly, a lot of stocks are cheap, but companies, at least companies in our space, aren’t necessarily for sale, based on their stock prices,” said Malone speaking at Liberty Media’s investor day conference in New York.
He added: “Some of these things may prove cheap for an investor for taking a position, but not necessarily strategically are these assets available, particularly in the communications and media space.”
Malone has often been mentioned as a possible buyer of the Rainbow Media Holdings cable network assets of Cablevision Systems Corp. But Jim Dolan, chief executive of Cablevision, said earlier this month that his company is less likely to sell assets in the current depressed credit environment.
Liberty Media, owner of a 50 percent stake in satellite TV provider DIRECTV Group Inc and home to the QVC home shopping channel and Starz Entertainment movie channels, operates under three tracking shares to allow investors to follow its businesses more closely. Chairman Malone, who controls Liberty, is a cable mogul who has amassed stakes in a broad portfolio of companies over his career.
While Malone wouldn’t rule out acquisitions, he said it would be “imprudent to set sail for long term strategy until we see how this the current credit and economic cycle turns out.”
In addressing the Liberty investors, he suggested the current mind-set should be to “mind your knitting, worry about your liquidity a little bit in the short run and continue to be open to acquisition opportunities.”
But those opportunities haven’t arisen, despite some dramatic drops in media and communications stocks, driven in part by concerns that the economic turmoil will dry up advertising revenue.
“So far, we haven’t seen that market break in terms of things that actually could be bought for cheap,” he said. “I‘m not aware at the moment of businesses that could be bought cheap ... in our space,” he said.
Malone added: “I mean if we wanted to buy something in investment banking we might find something.”
Liberty Interactive shares fell 28 cents to $13.43; Liberty Entertainment shares fell 27 cents $25.44; and Liberty Capital shares fell 18 cents to $13.84 on Nasdaq in afternoon trading.
Additional reporting by Yinka Adegoke, editing by Gerald E. McCormick