Backchannelmedia

The Denver Post

By Greg Griffin, The Denver Post

Nov. 10--Greg Maffei got a call from his longtime friend John Malone about a month ago. The chairman of Liberty Media Corp. was looking for a chief executive and wondered if Maffei knew anyone for the job.

Maffei, the chief financial officer at Oracle Corp. for just a few months, gave him some names. Malone called again a few days later and asked for more names. Maffei was at a loss. He told a friend, who said Malone wanted Maffei for the job.

"John was, in his own inimitable way, trying to send a signal," Maffei said Wednesday after being named Liberty's next CEO.

He will run one of the world's dominant media holding companies, with a market capitalization of $22.5 billion. Liberty, based in Douglas County, owns the QVC shopping channel, Starz Entertainment Group, 18 percent of Rupert Murdoch's News Corp., 20 percent of Barry Diller's IAC/Interactive Corp. and lesser stakes in other media titans, including Time Warner, Viacom and Sprint.

Maffei, 45, will join Liberty next week; in the spring he will assume the CEO job, now held by Malone, 64. Maffei also will become president, a title now held by Robert "Dob" Bennett, who resigned as CEO in August.

Among Maffei's challenges at Liberty will be to try to simplify its business structure. On Wednesday, Liberty announced the creation of Liberty Interactive, a so-called tracking stock for up to 85 percent of its equity assets, including QVC. If Liberty Interactive were eventually spun off, what remains, including the News Corp. stake and Starz, would be in a company named Liberty Capital.

"Greg is well-known and respected in the media and electronic-commerce industries and has extensive deal experience in these areas," said Malone, who will remain chairman of Liberty Media, as well as chairman and CEO of Liberty Global, the international cable-TV company, also based here.

Liberty Media's stock closed at $8.02, up 7 cents. The company reported a third-quarter loss of $94 million, 3 cents a share, compared with a gain of $372 million, or 13 cents, a year earlier.

Revenue rose 13 percent to $1.85 billion, helped by gains at QVC.

Sales at QVC, the company's biggest unit, gained 14 percent to $1.48 billion.

Ted Henderson, a cable analyst in Denver with Stifel Nicolaus & Co., said Liberty appears to be "unwinding" its assets rather than growing.

Maffei disputed that notion.

"I don't see that out there at all. I see an active team at Liberty that's very much interested in expanding and growing," he said. "I would like to see my hiring as evidence of a desire to keep growing and moving forward." Maffei said his departure from Oracle after only four months was purely driven by the opportunity presented to him by Malone. Recently, Oracle founder and CEO Larry Ellison had not mentioned Maffei when asked who his successor might be.

One analyst criticized Maffei's track record.

"He's going to have to do a lot to restore his credibility," said Trip Chowdhry, an analyst with FTN Midwest Securities Corp. in Cleveland, who covers Oracle. "He left Microsoft and then drove 360Networks into bankruptcy. Then he became CFO of Oracle. At Oracle, he didn't prove anything. Instead of sticking with it, building, showing results, he ran away."

Maffei joined Microsoft in business development in 1993 and served as chief financial officer from 1997 to 1999. There, he earned a reputation as a shrewd dealmaker and sharp financier who oversaw more than $9 billion in investments in cable, telephone and Internet companies. The investments didn't perform well, however, and the company has since written much of them off.

Malone and Maffei met and became friends when Maffei was investing for Microsoft. Maffei said the two often had lengthy discussions about technology, finance and business strategy. He recalled a conversation late into the night at a Microsoft gathering in Sun Valley, Idaho, over bottles of wine.

"John and I have a great relationship," Maffei said.

In 1999, Maffei left Microsoft for 360Networks, a Vancouver, British Columbia-based fiber-optic network company competing with Qwest Communications and Level 3 Communications. 360Networks went bankrupt in 2001 and emerged, with Maffei still at the helm, in 2002.

In June of this year, Maffei took a position as CFO and one of three co-presidents at Oracle under Ellison. Analysts said Maffei may have clashed with Ellison or with the other co-presidents, which Maffei denies.

That surpassed an estimate of $1.45 billion from Prudential Equity Group's Katherine Styponias in New York.

The business benefited from sales of accessories and jewelry. The U.S. segment of the division shipped 25.8 million items in the quarter, and the average price increased 5 percent to $43.69 from $41.60, Liberty said.

Revenue in the Starz Encore group was unchanged at $245 million, trailing Styponias' $255 million estimate.

-----

To see more of The Denver Post, or to subscribe to the newspaper, go to http://www.denverpost.com.

Copyright (c) 2005, The Denver Post

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

L, ORCL, MSFT, Q, LVLT,