Business

John Malone wants to be The Man of cable

“Grow big or go home” has been John Malone’s business plan since he was a cable-system operator in Denver in the 1970s.

Today Malone, 72, is at the center of a consolidation effort that would combat ever-increasing programming costs, as well as compete more efficiently with new providers like Netflix.

Charter Communications, in which Malone’s Liberty Media owns a 27 percent position, with its 6.8 million customers, is said to be lining up financing to acquire rival Time Warner Cable and its 12 million subscribers. A takeover of TWC could be valued at about $61 billion.

If Malone succeeds with the merger it could make Charter the number three cable service provider in the US.

Charter’s stock has been on a tear this year rising 90 percent while the company has added 1 million subscribers.

Malone and his CEO, Greg Maffei, met with large TWC shareholders in Denver last week saying the companies could wring out $700 million in annual synergies through a merger.

The savings could come from reduced capital spending, lower annual programming costs and other cuts in operating expenses.

To many on Wall Street, it’s no secret what else Malone hopes to accomplish in these moves.

Money manager Michael Holland succinctly summed up one of Malone’s motives in only two words: Make money.

“He is a moneymaker,” Holland said. “When smart people like him do roll-ups, they make a lot of money.”

Holland added that Malone’s independent view of the deal-making universe separates him from the pack.

“He has a dispassionate view and looks at the world in a detached, professional way that has served him well,” Holland said. “He is not afraid to look further out than other people. And when people go one way, he isn’t afraid to move in the opposite direction.”

So far in 2013, Liberty Media obtained the majority control of satellite radio’s SiriusXM for $158 million, and grabbed a big stake in Charter Communications for $2.6 billion.

Also this year, Liberty Global, which came into being in 2005 with the combination of Liberty Media’s international organization and UnitedGlobalCom, took over the UK cable-TV and Internet provider Virgin Media for $16 billion.

Liberty Media declined to comment for this story.

Can Malone succeed in putting his stamp on the cable industry?

“Even by the standards of top-level entrepreneur/CEOs, Malone stands out for the ferocity of his single-minded vision for his companies,” says Nell Minow, a corporate-governance expert with GMI Ratings.

Other cable players like Cablevision, Cox and Comcast are keeping a close eye on Malone’s doings and are reportedly speaking with bankers about financing their own expansion plans.