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Technology Stocks : IATV-ACTV Digital Convergence Software-HyperTV -- Ignore unavailable to you. Want to Upgrade?

To: Skip Jack who wrote (5892)	8/7/1999 1:52:00 AM
From: Skip Jack	Read Replies (2) \| Respond to of 13157

Date Posted: 8/6/1999 Masters takes tournament Billionaire or mere millionaire? Liberty Digital chairman pricks cablers curiosity The buzz is incorrect. Lee Masters is not a billionaire, never was a billionaire, even on paper. But briefly he came close. For months Liberty Digital Chairman Masters' wealth has been one of the hotter topics of gossip among cable executives. Masters surprised many in the industry by quitting as head of network E! Entertainment Television and joining Liberty Digital, a new unit of Liberty Media Corp. designed to marshal the company's various Internet and interactive TV investments. But even more startling was when a stock tied to Liberty Digital soared tenfold in early April. Few outsiders knew much about Masters' pay deal, but it quickly became apparent that he was worth a lot more than the $20 million payoff he got when leaving E!. Speculation quickly emerged that after just three months on the job, his stock incentives were worth $1 billion-$2 billion. Last week, however, details of Masters' compensation package emerged in a securities filing related to Liberty Digital's planned merger into another publicly traded Liberty Media affiliate, TCI Music Inc. The filing shows that just eight months after joining Liberty Digital, Masters has a five-year package that Friday morning was worth some $330 million, and for several weeks had been worth more than $800 million. The only other executive of Liberty Digital, Executive Vice President Bruce Ravenel, has a similar package worth $88 million. Despite the amount of Internet-spawned wealth, Masters' package surprised even wealthy cable executives. "We were all teasing him about it," said the CEO of one cable operator. Masters noted that he has to keep the stock strong for years to make anything "We always try to stress that looking at it now is kind of silly." When Masters moved in, Liberty Digital's portfolio of investments in companies like iVillage, ACTV and a venture capital fund was worth roughly $500 million. The filing shows he agreed to accept just half the $1.5 million he got at E!, but in exchange he wanted 7.5% of the increase in the company's equity above $500 million, but only if he increased the company's value more than 61% over five years. The big surge came in April when Liberty Media decided to take Liberty Digital public in a "reverse merger" with publicly traded TCI Music, which was composed primarily of long-sluggish music-video-service The Box and loss-ridden cable digital-audio-service DMX. Internet-addled investors pumped TCI Music from $5 per share to $61 in a few days, ballooning TCI Music's value from $300 million or so to $13 billion for the combined companies. The stock since has slid and traded at $24 last Friday. Masters' and Raveneloptions will be priced at $2.46 per share. The pay packages are so rich that they became a major point of contention with TCI Music's advisers insisting that Liberty Media, not TCI Music, pick up the tab. Liberty Media President Dob Bennett considers it a "sweetheart deal" for TCI Music shareholders. "They get this great executive talent, and we're paying for it." Further, "he will only get anything if the stock performs, and all the shareholders benefit."