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Is John Malone really worried about Comcast-NBC or is there another agenda at play?

November 19, 2009 | 12:22 pm

How's this for irony? Liberty Media Chairman John Malone, the cable mogul who was once dubbed Darth Vader by Al Gore and who wrote the book on how to combine content with distribution, squeeze competitors and build an empire, is apparently worried that a Comcast-NBC Universal combination would be too big.

According to the Associated Press, Malone said in an interview that the deal would require competitors to "look pretty hard on how they can protect themselves from the kind of market power that would represent."

MALONE Malone certainly knows a lot about market power. He built Tele-Communications Inc. into the nation's largest cable operator in the 1980s and used that leverage to become a major content provider as well. If you had a cable network and wanted to get distribution, you had to cut a deal with Malone. Regulators routinely had Tele-Communications in their sights, and even other media giants complained of strong-arm tactics from Malone and TCI. Sumner Redstone's Viacom even once sued TCI and Malone on anti-trust grounds.

While his footprint in American media has definitely shrunk, Malone is still a force. Liberty owns satellite broadcaster DirecTV, a stake in satellite radio operator Sirius XM, a big chunk of Barry Diller's IAC/InterActiveCorp, the Atlanta Braves and a piece of the Denver Nuggets. Malone himself has a stake in Discovery Communications and sits on its board.

Consumer advocates and media watchdogs are already making noises in Washington about a potential Comcast-NBC Universal combination. Malone told Reuters that DirecTV will have a "point of view" on the as yet unannounced deal. It is rare for a rival media mogul to speak out against a deal, particularly one who has such disdain for government involvement in business. We were unsuccessful in an effort to reach Malone to see if he is really worried about the deal or if his remarks were taken out of context.

While it is unlikely that other media companies will publicly criticize the deal, that doesn't mean they don't have other ways in which to make their presences felt. Often they form alliances behind the scenes in an effort to sway regulators without leaving fingerprints. One of the more amusing examples of this was when News Corp. Chairman Rupert Murdoch lobbied the National Religious Broadcasters to make noise against a proposed merger of satellite broadcasters EchoStar and DirecTV in 2002. Murdoch wanted DirecTV for himself (and later got it, only to eventually sell it). The Wall Street Journal reported how Murdoch went to the annual NRB convention in Nashville to try to get them involved his fight and even joined a prayer circle while there.

Odds are that the shrewd Malone wants something out of Comcast or NBC and this is his way of making his presence felt. He's already in a little battle with Comcast over the cable giant's sports network Versus, which DirecTV has stopped carrying because of a feud over money. Don't be surprised if Malone's  objections fade after some backroom deal gets done. It's not exactly Chinatown, but this is how business is done in D.C.

-- Joe Flint

Image: John Malone. Credit: Andrew Gombert / European Pressphoto Agency
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