WHEN: Today, Thursday, November 14, 2023
WHERE: CNBC’s “Squawk on the Street” – Liberty Media Day
Following are excerpts from the unofficial transcript of a CNBC exclusive interview with Liberty Media Chairman John Malone on CNBC’s “Squawk on the Street” (M-F, 9AM-11AM ET) today, Thursday, November 14 for Liberty Media Day. Video will be available on CNBC.com: https://www.cnbc.com/video/2024/11/14/liberty-medias-next-generation-may-not-be-in-the-media-business-says-chairman-john-malone.html.
All references must be sourced to CNBC.
DAVID FABER: We continue our live coverage from Liberty Media Day, where we have been getting a lot of color, of course, in the last 24 hours in terms of announcements. CEO transition, the deal with Charter, spinoff of key assets. And now I’m pleased to be joined by Liberty Media’s chairman, John Malone, soon to be as well the interim CEO of the company. John, so glad we could do this in addition, of course, to our annual sit down that we did a couple of weeks ago that I should say will be available on our CNBC Pro starting later today. What’s going to happen now, John, to Liberty Media, specifically to F1, which is really going to comprise what many investors will consider the company?
JOHN MALONE: Well, first of all, David, I watching Greg being interviewed and listening to his presentation this morning, he is a fabulous executive. He’s done wonderful things for me and my shareholders, and we certainly hope that our futures will come back together at some point when he’s rested up. And I certainly personally would invest in anything Greg wants to do. So I can’t say enough about Greg positively. This simplification really means that each one of the Liberty vehicles will be separate public companies defined really by a singular set of businesses. So, Formula 1 becomes a asset-backed company in the racing business, with F1 and Dorna with one balance sheet and with the current ownership structure. As you know, I’m effectively the control shareholder of a number of businesses through my voting position. I will continue to vote approximately 49 percent of the votes in Formula 1. It ain’t going to be easy, but we will find a CEO for a holding company who will continue to support Stefano and the management team. Greg has assembled a great group of people at headquarters who will do the burden. At 83 years old, going 84, I’m unlikely to be a highly active CEO. So my role is entirely transitional to support the team, seek to change the board of directors of Liberty Media in order to better focus on the racing businesses, and also to try and use my creative spirits to create the generation four of Liberty Media—
FABER: Right.
MALONE: Which would probably not be added onto Formula 1. It will probably be a separate undertaking.
FABER: So, alright, another generation of Liberty Media. John, you and I, a couple of weeks ago — and, again, I’m going to encourage people to watch our long interview as well that — when we make it available — you talked a lot about simplification. You talked a lot about the fact that you’re going to be 84 years old, that your wife is encouraging you to make things simple, get sort of have the exit plan, so to speak. And you wanted to attack a lot of the discounts that your various securities traded at, in part because of the complexity around them and the impatience that investors have. So I guess when I hear you say a next generation of Liberty Media, I wonder, well, what does that look like and what are you talking about and who’s going to lead it?
MALONE: Well, I guess I’m going to lead it, in the sense that I can be the strategic player. I have to find the appropriate CEO. The Liberty Media team that Greg has assembled to do all the wonderful things that have been done over the last 19 years is perfectly capable of doing more than one thing. And so I’m thinking that the Liberty Media team, a little bit of my capital, perhaps, and some innovation can put together the next-gen Liberty. It may not be in the media business. As you know, I have a wide—
FABER: Oh, really? It might be another — yes, another, business, OK. Yes.
MALONE: Yes, I have a widely dispersed set of personal assets. So I think the scope can be quite broad. We’re looking for opportunity. In order to build a business and bootstrap it, you have to be complex. You have to use the tax attributes. You have to figure out your way around all the regulatory issues that are involved in being a public vehicle, the antitrust issues, the structural issues. And so as we try to build generation four, expect something completely different, very innovative, I hope. And so it’s not over for Liberty Media or the — let me call the staff of Liberty Media. Liberty Media itself probably morphs into Formula 1 or—
FABER: Right.
MALONE: A holding company for racing businesses.
FABER: And then, right. Then you move on to potentially different fronts. As for Formula 1, John, do you see it continuing as an independent company? Is there the possibility that you would entertain offers for Formula 1 if they were at the right price?
MALONE: I have kind of concluded after all these years that I want to use my control to maximize the value for my shareholders. I have not taken or sought a control premium really on any transaction in the last 20 years. So I’m willing to trade out my control position if it’s in the long-term interest of my shareholders. I think that’s happening in the Charter broadband merger. That happened with Liberty-Sirius.
FABER: With Warner Bros.
MALONE: It could happen with the Atlanta Braves. Whatever is best for the organization and the shareholders, taking a long-term view. So I used to say the door is always open.
FABER: Yes.
MALONE: But I believe Formula 1 has a very bright future as is. And the management team has done a brilliant job. It has a very powerful brand now that can be expanded on. And there are many opportunities to expand in the racing business synergistically. So I think — I think I’m certainly going to watch it for a few years before any decision that it would be better off combined with something else.
FABER: Speaking of combinations, we have a new administration coming into power. You and I have talked deals for many, many years in terms of the possibilities. I had Chris Winfrey, the CEO of Charter, as a guest just a short time ago. Do you think that there is going to be a possibility for combinations that perhaps had not been possible under the current administration, a la cable, cable and wireless, Comcast and Charter?
MALONE: The regulatory—
FABER: Or are we moving too fast here to imagine that?
MALONE: No, I think the – backward-looking. And I think it needs to look forward. We now have a media world that’s dominated by big tech, massive balance sheets, sort of unlimited elbow room, bringing in new technologies – on the ability of the existing players to consolidate—
FABER: Yes.
MALONE: Charter, for instance, restricted to 30 percent of the U.S. is kind of silly. And, similarly, the media companies need to combine to have enough scale to continue to play, let alone to dominate. So I do think and I’m hopeful that, with this change in administration, we will see a more forward-looking attitude about competitors and competition. The airline industry doesn’t require every airline to have its own airport or every trucking company to build its own highways. The cooperation amongst businesses to reduce capital expenditures and to improve efficiency of operation seems to be logical and it should be strongly supported by regulators rather than opposed.
FABER: Right. That’s something you have a theme you have discussed many times, of course, in terms of net neutrality and what that imposes on many of the carriers as well or the distributors, and the fact that so much capital has been spent by the overbuilders. John, I want to move through a couple of things here, because this not our typical lengthy sit-down. On Sirius, which you mentioned earlier, which obviously trades as its own, how — what is your thought about that company? I asked Greg about it as well. I asked in part because some investors have thought to me, brought up to me the idea that you could cut SG&A there, that it might be a better as a private company. What are your thoughts?
MALONE: Well, I’m – taking a much bigger stake. You know, Greg is chairing there – is to manage a maturing business which—
FABER: Yes, unfortunately, we’re taking a lot of hits on John’s feed there. I would encourage people to and we will perhaps share more of our long sit-down as well on our air, but I would encourage people to go to CNBC Pro as well. Many of these questions were asked and answered there.
For more information contact:
Jennifer Dauble
CNBC
t: 201.735.4721
m: 201.615.2787
Stephanie Hirlemann
CNBC
m: 201.397.2838
