Exclusive: Greg Maffei On: The Economy, Barry Diller, and Starz vs. Netflix
Liberty Media CEO Greg Maffei has been busy, between finalizing his swap with Diller's IAC, and planning ahead to when Starz contract with Netflix expires. I snagged him for a rare exclusive interview at the UBS Media & Communications conference, and he weighed in not just on those big issues, but also on the state of the American economy.
Just last week Maffei swapped Liberty's stake in IAC Interactive Corp for some cash, Gift.com and Evite.com. I asked him why. Very simply, it's part of his strategy to focus on the businesses that Liberty fully controls. Liberty's minority investments in other companies are simply not as attractive as consolidated assets.
Do Liberty's Chairman Malone and Maffei want to split with Diller? He says that's not it, after all, they're still working together on Expedia, of which Liberty owns 24 percent. And Liberty is still significantly invested in Live Nation, and Diller sits on Live Nation's board.
Starz is one of Liberty's main consolidated assets, and investors have been preoccupied with the question of what happens when Starz streaming distribution deal with Netflix expires. On one hand, some say Starz could up its annual take from Netflix from $30 million annually to hundreds of millions of dollars. On the other hand, Starz studio partners, Sony and Disney, concerned about cord cutting, could push back against such an inclusive deal. Maffei wouldn't reveal much about negotiations with Netflix, other than to say that some streaming delivery system, Netflix or a rival, will be part of the business moving forward. (This is one topic we'll be watching carefully).
Between Starz and assets like QVC, Maffei has a unique perspective on the economy. Thanks to the extension of the tax rate Maffei is now cautiously optimistic — he says that's a positive for consumer income and to drive demand for consumer services. But he's still incredibly cautious about consumer spending, noting high debt levels and foreclosures.
But when it comes to advertising, Maffei is far more optimistic. He projects advertising to recover both in the US and abroad next year, pretty much across the board.
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