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To: Bud Wiser who wrote (592)	3/10/1999 5:09:00 AM
From: Steve Hausser	Read Replies (1) \| Respond to of 13157

Liberty Media's Malone Envisions A Number of Internet, Cable Deals By LESLIE CAULEY Staff Reporter of THE WALL STREET JOURNAL When AT&T Corp. agreed to buy Tele-Communications Inc. for $32 billion last June, some speculated that TCI Chairman John Malone would ride off into the sunset on his yacht, Liberty. No chance. Now at the helm of another Liberty -- AT&T's Liberty Media Group, the former programming arm of TCI -- Mr. Malone is steering toward new deals in uncharted waters. "We have plenty of financial firepower to do anything we set our minds to do," said Mr. Malone in his first extensive interview about the next chapter in his closely watched career. Under terms of the AT&T deal, which closed Tuesday, Liberty will operate with almost complete autonomy within the AT&T empire. Liberty begins trading as a separate tracking stock of AT&T on the New York Stock Exchange Wednesday. Mr. Malone says he wants to invest primarily in media and Internet companies, despite the inflated prices of some properties these days. "I see a lot of deals," he says. He is weighing options that, true to his style, are aimed at avoiding taxes while enriching shareholders. Among the projects he is considering: starting an interactive-TV channel that would give viewers step-by-step instructions on how to use the Internet and providing digital set-top boxes to cable companies that don't want to shell out big bucks themselves in exchange for equity in their companies. Liberty's current assets range from 49% of The Discovery Channel to 10% of Time Warner Inc. In addition to stakes in leading entertainment, sports, retailing and Internet companies, Liberty has $5.5 billion in cash and a market value of $36 billion. 'Risks and Upside' Wall Street so far likes what it sees. "Liberty is the last of the swashbuckling entrepreneurial cable stocks, with all the risks and upside that that brings to it," says Tom Wolzien, an analyst with Sanford C. Bernstein. Liberty's stock price has shot up more than 30% since AT&T announced plans to buy TCI, a nod to the market's belief that things can only get better now that Mr. Malone is devoting his attention to the company. Despite speculation that Mr. Malone will use Liberty to go after a big media property such as General Electric Co.'s. NBC unit, Mr. Malone says such a buy would be unlikely given Liberty's -- and his own -- investment philosophy. "We've never paid big dollars to buy big businesses," he says. Liberty has only 25 employees and is essentially a holding company. It will remain headquartered in Denver, where longtime Malone lieutenant Robert Bennett will continue to serve as chief executive and oversee day-to-day operations. Mr. Malone makes it clear that he'll be tending to Liberty closely in the way that he does best: by offering up his thoughts and ideas on the industry, and where to seek out deals. Mr. Malone, who divides his time between Denver and a vacation home in Maine, travels between the two places in a deluxe RV. He says he'll continue to drop in on Liberty's monthly executive meetings to noodle around with ideas, which he calls "a lot of fun." Mr. Malone says Liberty's balance sheet gives the company the luxury of not having to worry too much about traditional benchmarks, such as profit/loss statements, when considering potential investments. In keeping with Liberty's practice over the years, Mr. Malone says, Liberty would like to continue to make minority investments, in the 25%-to-30% range, in companies it regards as highfliers with good management teams. He says Liberty regularly uses its extensive roster of industry contacts to help companies it invests in. That might include lending technical support from, say, General Instrument Corp., which Liberty has a stake in. "We try to use the assets we already have," Mr. Malone says. He says Liberty, as a routine practice, wants to be an "influential investor, but not control" any company it chooses to invest in ... We are prepared to be substantially passive in day-to-day management." Under the AT&T deal, Mr. Malone notes, Liberty gets guaranteed space on TCI's cable-TV lines -- enough to provide 14 channels. That gives Liberty a built-in audience of 10 million customers, over time, for any channel it may choose to launch in the future. International plays are another option. Mr. Malone says he sees loads of investment possibilities in Japan for communications networks -- including phones, Internet and video. "It may take forever, but we're a long-term investor," he says.