Home Value Investing Denali Investors Updated Presentation: The Malone Complex

Denali Investors Updated Presentation: The Malone Complex

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Denali Investors updated presentation on the John Malone (Liberty) entities

Also see Denali Investors: Special Situations – John Malone Case Study and  How John Malone Creates Value Through Joint Ventures, with Kevin Byun of Denali Investors and The John Malone Complex – A Study in Financial Brilliance

Purpose of Presentation

  • Because we have benefited from investing alongside John Malone through numerous entities, the purpose of this presentation is part analysis, part history, part opportunity, and part tribute
  • Due to only perceived complexity, most investors are unaware of one of the greatest owner/operator/allocators of this time
  • These opportunities are hiding in plain sight, if one is simply paying attention
  • Yet I have never seen consolidated summary or analysis across the Malone entities, so I decided to do it myself

Creating Liberty Media – 1991

Lowest Paid, Best Performing CEO

  • “During the preceding 15 years, Malone had enjoyed a reputation of being one the lowest-paid, best performing CEOs in America.”
  • “For more than 15 years of running TCI, what drove Malone was a determination to create the biggest and most cash-efficient cable operator in the country… Yet, for all this, his stake was puny: a tiny fraction of 1% in 1991.”
  • “It was making Bob [Magness] very rich. And Bob wasn’t reciprocating. And that was just Bob… That’s what created Liberty… And it worked.” – Malone (Note: Magness was a father figure to Malone and there was no ill will)

Government Impetus

  • “Based on talks with his attorneys as well as his cable colleagues, Malone suspected that government regulators would try to force him to split TCI in two – a distribution company, owning all of TCI’s cable systems, and a content company, owning interests in cable channels. So Malone decided to do it for them.”
  • “In early 1991, he set up plans to form a new company, Liberty Media, and planned to stock it with more than $600 million worth of assets from TCI, roughly half the value in cable systems and the other half in programming stakes, mostly minority interests in small and large channels.”

Source: Cable Cowboy: John Malone and the Rise of the Modern Cable Business

Full presentation below:

The Malone Complex Presentation – 2014.11.19 VPublic

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