Liberty Media loses $4.6bn

John Malone’s media stocks holding company has sustained losses of US$4.6 billion after taking huge writedowns of $5 billion in the first half of 2002.

  • E-Mail
By  Marcus Webb Published  August 18, 2002

The depressed state of the media industry was further underlined on Friday when Liberty Media, one of the sector's most prolific investors, reported a loss of US$4.6bn after sustaining huge writeoffs on its investments in AOL Time Warner and News Corporation.

The figures were disclosed as Europe's largest cable company, UPC - which is controlled by Liberty - warned it could file for bankruptcy.
Following the losses announced by News Corp on Thursday, Liberty - the second largest shareholder in Rupert Murdoch’s company - wrote down the value of its investments by $5.1bn during the first half of 2002. The loss compared with a deficit of $2.3bn in the same period last year. Liberty said it had sliced $2.3bn from the book value of its investment in AOL Time Warner, $1.4bn from its stake in News Corp and more than $2bn from its holding in US mobile phone network Sprint PCS.

AOL Time Warner shares have been under intense pressure this year as questions have been raised about its ability to re-inject growth into the AOL Internet operation. The shares have also been unsettled by investigations into the accounting methods of AOL by both the SEC and the US justice department. Despite steadfastly maintaining that the firm's accounts were accurate, AOL admitted on Wednesday that it had uncovered at least $49m that may have been incorrectly booked as advertising revenue. Shares in AOL have fallen by 70% this year. Liberty owns 171m of its stock, putting it among the largest shareholders.

Dutch-based UPC, controlled by Liberty's UnitedGlobalCom, has been pushed to the brink of collapse by an acquisition spree and the cost of investing in its networks. It has debts of more than $10bn. UPC said it would file for bankruptcy if it fails to secure a restructuring deal. Analysts said the warning was an attempt to twist the arms of bondholders reluctant to take part in a debt restructuring that would boost the position of John Malone, who runs Liberty Media.

Liberty Media reported revenues of $1bn for the first half, in line with last year's sales. Operating profit was $65m, against losses of $402m a year ago.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code