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The Cable Cowboy

February 5, 2002

The US cable giant Liberty Media is intent on getting its foot in the door of the German market. Although it's having difficulties doing so, Liberty's chairman John Malone is not the type to back down easily.

The Darth Vader of the media world: John Malone.Image: AP

The chairman of Liberty Media Corporation, John Malone, evokes a mixture of awe and disdain among his friends and enemies.

He is well-known for his shrewd and intelligent business tactics. At the same time, the 60-year-old, who former US Vice President Al Gore once compared to Darth Vader, is feared for his manipulative and opinionated methods of dealing.

German anti-trust authorities will have to wait and see which side they get. Malone has until mid-February to rehaul his proposal to buy a 60 percent stake in Deutsche Telekom's cable television network after the Federal Cartel Office in Bonn expressed serious objections to it. The office was worried it could give the Denver-based company dominance in the German cable television market.

That is exactly what Malone would like.

The Colorado native has presided over Liberty Media since 1990. With just some 60 employees, the Denver-based group mainly consists of holdings in other significant media companies in North America and Europe.

It has developed into one of the most influential media groups in the world. Since the second half of 2001, Liberty has been aggressively acquiring cable operators and content developers, particularly in the European Union.

A low-key appearance

Malone appears to be the born manager. The son of a General Electric manager, Malone got his Bachelor of Science in Electrical Engineering and Economics at the prestigious Yale University. He went on to earn a Master of Science in Industrial Management and a PhD in Operations Research, both from Johns Hopkins University.

The tycoon is well-known for his dislike of being photographed. When possible, he avoids public appearances.

Media ties

In the 1970s, Malone entered the television cable business as an investor. In 1999, he sold his cable empire TCI for 62 billion euro ($54 billion) to his former employer, telecommunications giant AT&T.

Today, he owns 18 percent of his good friend Rupert Murdoch's News Corporation, which controls an entire spectrum of broadcasters and newspapers in North America and Europe. Liberty holds 4 percent of AOL Time Warner.

The home shopping channel QVC is part of Malone's empire, too, with 43 percent. Almost half of documentary channel Discovery also belongs to Malone.

German antitrust authority expresses doubts

Now he's set his sites on Deutsche Telekom. The 60 percent stake in the concern's cable television network is worth 5.5 billion euro ($6.3 billion) and could give him control over both program content and the cable network in Germany.

The plans set off alarm bells for many German television broadcasters. Private and public stations alike fear that Liberty will only give them limited access to his cable network.

The antitrust authority agreed, saying that the deal under its current terms could do more damage to competition on the cable television market than boost competition in related areas.

Malone and Liberty Media have two weeks to convince them otherwise.

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