'Fortune': Liberty Media in $3B Asset Swap With UnitedGlobalCom
DAVID HAFFENREFFER, CNN ANCHOR: Liberty Media is paying more than $3 billion for a stake in UnitedGlobalCom, a European telecoms and cable TV firm. Janet Guyon of "Fortune" magazine has more now from London. Janet, why is Liberty Media's John Malone looking at a European company now?</s>JANET GUYON, LONDON BUREAU CHIEF, "FORTUNE": Well, actually, this is a typical John Malone deal. It's complex and opaque. He's essentially getting a 45 -- through this assets swap he's essentially getting a 45-percent stake in UnitedGlobalCom, which has a major subsidiary called United Pan-Europe Communications. Now, United Pan- Europe Communications, or UPC, is a very big cable player over here. It is -- if it completes some of its plans, it will be Europe's number-one cable company. It appears that what Malone is doing here is separating out the broadband assets from the programming assets, leaving all of the programming assets, that is the content, in Liberty Media and putting the distribution assets in UnitedGlobalCom or UPC. In Europe in particular this is interesting because this market is growing very fast, it's very hot. A lot of people think that people will get not just television content through cable, but also Internet content. And Malone also controls another company called Liberty Digital which has Internet content. So it appears that it's a separation of the programming and Internet assets from the distribution assets.</s>HAFFENREFFER: Are we getting a peak here at Malone's long-term plan?</s>GUYON: Well, obviously Malone's long-term plan is to become even richer than he already is. But it does seem to me that his long-term plan is to have control over that content, to own the content while still having his fingers in the distribution. You know, Liberty Media is a tracking stock of AT&T;, which AT&T; acquired when it acquired TCI a year or two ago. And Liberty Media, Malone's company, has rights to distribute its content on AT&T;'s wires. One would guess that it may also, through this transaction, get rights to distribute its content on UPC. So it seems that his long-term plan is own the content and have rights to the distribution.</s>HAFFENREFFER: And get richer. All right, thank you very much, Janet Guyon out of London, "Fortune" magazine.</s>GUYON: Yes.