Liberty Media was founded in 1991 by John Malone. The company was a spin-off of the mid-century cable company, Tele-Communications Inc, which grew to be one of the United States’ largest cable companies. The early history of Liberty Media is a rather long string of mergers and acquisitions that defined the corporate landscape after the Telecommunications Act of 1996. Suddenly the venture capital money that was flowing into new technology firms was butting heads with established twentieth-century media players in print publishing and cable broadcast. In 1999,
AT&T bought Liberty Media only for a couple of years later
to split off the company leaving it with cable brands like Discovery and QVC. A few years later
Liberty would trade some assets including 10% of E! Entertainment, 100% of International Channel Networks, and $545 million to get back the stock Comcast owned in Liberty. This sequence of buying and selling would define much of Liberty’s early decades of existence. (Before I get further into this, I’m going to center primarily on Liberty’s dealings with music companies, so I’ll set aside its ownership of the Atlanta Braves and Formula One Racing. A ridiculous caveat but one I still must make it.) Now, Liberty Media wasn’t the only company tangled in endless corporate shuffling, let’s stake about the Home Shopping Network.
Made during the heart of the financial crisis, Live Nation and Ticketmaster merger was met with much
chagrin to many within the industry concerned about potentially anti-consumer and worker outcomes. A reason for Live Nation’s eagerness for the merger was $800 million it sat in debt and the
New York Times also
reported Live Nation’s CEO Michael Rapino expressed concern over a potential outside purchase. Now, This left Liberty Media with a minority share,
which it upped in 2010 to gain a controlling share of what is now known as Live Nation Entertainment.
I don’t think it makes any sense in putting [DirecTV and a merged Ticketmaster-LiveNation] together, but there could be a lot of synergy in them working together. If DirecTV says it’s ready to promote new talent and you want to take it on tour, you know, it kind of works. And the ubiquity of DirecTV makes it kind of unique. You don’t want to put it on broadcast TV because then everyone gets to see it for free, right? What you really want to do is promote something, increase its economic value by having an element of scarcity, a uniqueness, but still be able to monetize it effectively…We have a big stake in [travel-booking website] Expedia, and I think ultimately [time-share vacation services company] Interval Leisure Group, which is one of the spinoffs of IAC, should relate to each other.
Malone’s outlining of potential corporate synergies feels like an excellent distillation of the Clintonian era of media conglomerates. Where on paper, or in an interview, dots could be connected for thoroughly extensive corporate power, the reality mirrored far closer to the previously-outlined in wreckless mashing-up and then decoupling of companies. That’s not to say there weren’t real consequences to such mergers as we’ll see in Liberty’s next big play.
In 2007, Sirius Satellite Radio and XM Radio
announced a merger. Both companies were, no surprise, loaded with debt after years of
attempting to make a new radio market that was explicitly outside of the realm of already publicly regulated radio. Even after over a decade and billions of investment dollars, there wasn’t much of a clear business path for either company. Again, similar to Live Nation, Ticketmaster’s merger was
met by loud public outcry, including Massachusetts senator Ed Markey who correctly foresaw “a satellite radio monopoly”. The merger
still went through and within a year of completion,
Liberty Media was ready to invest in the newly minted, though still
heavily indebted, radio giant.
Other major music moves made by Liberty Media have been a little less dramatic. The company publicly invested in the Indian music streaming platform Saavn during its series C round, though
Business Standard reported they were already a prior investor. This investment took a new character when Saavn and Jio merged to create JioSaavn, one of India’s largest music streaming platforms. SiriusXM also made a
massive investment into Pandora in 2017 before completely buying out the company in 2019 and invested
$75 million into SoundCloud earlier this year. (In case you don’t read to the bottom, that’s where I work for my day job.) Still, those inner moves of SiriusXM are a bit minor compared to Liberty’s bigger prize.
Since 2018, Liberty Media’s made
numerous public gestures at buying up a larger share of iHeartMedia, formally known as Clear Channel. So far nothing went through, so the company sits still with its 5% state in iHeartMedia but earlier this summer the
Department of Justice did approve the company taking over 50% of iHeartMedia. This now creates a when, not if, countdown clock till Liberty takes an even more outsized role in the music industry.
Now, let me be clear: These are all some of the music industry’s worst offenders of labor and consumer abuse. Live Nation created the
360 deal model, SiriusXM dragged its feet for years dodging royalty payments, and Pandora, which didn’t pay employees for years, also was a leader in suppressing payouts to artists. Now, iHeartMedia did change from its old name of Clear Channel but the company is the purest distillation of the Telecommunications of Act of 1996, which led to massive radio consolidation and job loss. Now many of these poor corporate actions well predate Liberty Media but their ownership hasn’t seen much positive reform in these companies’ activities,
perhaps even some regression.
The last couple of years of moves have given
rise to increased speculation about the
company’s vision with all of these moving parts. (Or even
rumors of additional entertainment investments.) Over the last 30 years of Liberty Media, one could rightfully argue there isn’t a coherent media vision from the company. That is just one part of a company that includes the Atlanta Braves, Formula One racing, and various cable channels. The Clintonian era conglomerates that were allowed to balloon through the 1990s similar were just collecting pieces seeing what worked, what didn’t and moving along. This differs from the highly financialized major label system where there is a bit more desire for mutual cooperation amongst firms. The end result is probably best explained from a
Billboard quote from Josh Hill, an investor in Liberty Media, that he gave earlier this year about what buying into iHeartMedia could mean (emphasis mine):
“You could cut duplicative cost functions like finance, HR, and marketing and reinvest into the business through technology and data collection,“ Hill says. "You can see what people are listening to on playlists. You can go to advertisers and say, ‘We have this podcast and the prime listening demo is women aged 35 to 45 who have kids and jobs.’ You say to the DOJ: 'We’re going to make that more, instead of less, attractive to the consumer.
Job cuts and better advertising. A vision everyone in the music industry can get behind.
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