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Liberty Media’s Q2 a mixed bag; Liberty Capital to split stock

Wed, 08/08/2007 - 8:30am
Mike Robuck

Liberty Media said during its second-quarter earnings report today it will split its Liberty Capital Group into two stocks once the deal to buy DirecTV closes.

Cable pioneer John Malone and Liberty Media expect the acquisition of DirecTV to close either later this month or in early September. Once that happens, the new trading stock will be Liberty Entertainment Group, which will include Starz Entertainment, Fun Technologies, GSN, DirecTV and the three regional sports networks included in the deal, and WildBlue Communications. Liberty Capital will trade as the second stock and will include a smaller group of Liberty assets.

"The reclassification should achieve two purposes,” said Liberty President and CEO Greg Maffei, in a prepared statement. “First, it will create a focused distribution and programming business in Liberty Entertainment. We believe this new Liberty Entertainment group equity should increase shareholder value and provide a strong currency that will increase our strategic flexibility. Second, the new Liberty Capital group will focus the complexity that contributes to our trading discount into a single, smaller group of assets that can be more effectively simplified over time."

Operating income at Liberty Capital Group dropped to $42 million from $44 million.
Starz, which is part of Liberty Capital, saw its revenue decrease by 4 percent to $254 million while operating cash flow increased 10 percent to $55 million.

Home-shopping network QVC, which is in the Liberty Interactive Group, saw an increase of 4 percent in its revenue to $1.69 billion while its operating income went from $242 million a year ago to $244 million.

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