Liberty Media CEO sees no on-off switch for Covid: It will linger

Key Points
  • "The pandemic, in our view, will linger," Liberty Media CEO Greg Maffei told CNBC.
  • The uneven recovery may create investment opportunities for Liberty Media's new special purpose acquisition company, Maffei said.
  • "This isn't going to be a switch turned off or on, in terms of the economy," he said.

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Liberty Media CEO Greg Maffei on entering the SPAC market

Liberty Media CEO Greg Maffei told CNBC on Thursday that the economic recovery from the coronavirus crisis will be uneven across sectors, potentially creating investment opportunities for the sprawling media, sports and entertainment company.

"The pandemic, in our view, will linger. This isn't going to be a switch turned off or on, in terms of the economy," Maffei said on "Squawk on the Street." "There are going to be different segments which come out at slower rates."

Some hold out hope that the widespread availability of a Covid-19 vaccine will cause a snapback in the economy to pre-pandemic ways. But for Liberty Media, which owns the Atlanta Braves and a big stake in Sirius XM, Maffei said the likelihood of a variable recovery is one reason Liberty launched a special purpose acquisition company. "I think there are going to be opportunities," he said.

Filed with the Securities and Exchange Commission on Thursday, Liberty Media Acquisition intends to raise $500 million that is then used to acquire a private company, thereby taking them public in a process sometimes called a reverse merger. SPACs have seen a sharp rise in popularity during the pandemic.

"One of the reasons we have the SPAC, one of the reasons we're thinking through that, is to think about those investment opportunities that may result because of those consequences of the consequences of the consequences," Maffei said, a reference to a line from a 2003 lecture given by Berkshire Hathaway Vice Chairman Charlie Munger.

Liberty Media is evaluating the coronavirus pandemic in a similar way to how it has approached investing in the digital and mobile revolution over the last 10 to 15 years, Maffei said. It is focusing on "how that is going to either accelerate certain things or hurt other things, or whether the market has overestimated the impact."

Travel is one area where there may be fundamental change" as a result of the global Covid-19 outbreak, he said. Business travel, in particular, will not return to pre-pandemic levels for "a very, very long time," he said, which echoes comments made earlier this week by billionaire Bill Gates. The Microsoft co-founder said he believes 50% of business travel will "go away" as a result of the pandemic.

"On the other hand, I do believe leisure travel, in fact may accelerate," Maffei said. "People's desire to get out and try something different, particularly if you have the means to do so, will come back. We're trying to weigh all those pieces."

Liberty Media stock was slightly higher at midday Thursday, trading at $42.87 per share. The stock is down more than 10% this year.