Liberty Media to Split Off Starz

If merging and splitting up businesses were an Olympic sport, media mogul John C. Malone‘s empire would win gold.

In the latest restructuring twist, Liberty Media and the premium cable business Starz will split, leaving Starz as a separate publicly traded company. Liberty Media announced on Wednesday that its businesses, assets and liabilities - minus those of Starz - would be put in a new company whose shares would be distributed to Liberty Media shareholders. Starz, with about $1.5 billion in debt and an undetermined amount of cash, will become a separate company.

“This transaction will provide better transparency on the Starz operating business; optimize the Starz capital structure; permit us to better pursue our strategic objectives, including creating two currencies that could be used for acquisitions; and create significant liquidity at Liberty Media, which preserves all our options with respect to SiriusXM and Live Nation,” Greg Maffei, pres ident and chief executive of Liberty, said in a statement.

The spin-off is intended to be tax-free to stockholders of Liberty Media and will not require a shareholder vote, the company said. It is expected to take place later this year.

“I believe this stand-alone structure is the first step to unlocking the real potential growth opportunities for our businesses,” said Chris Albrecht, chief executive of Starz.

“Boss” and “Spartacus” are Starz cable shows. The Starz cable service had 20.7 million subscribers at the end of its second quarter while its sister Encore had 34.2 million subscribers.

The business recorded $403 million in revenue for the quarter, unchanged from a year ago, and operating income of $100 million, down from $112 million in the quarter a year ago.

Mr. Malone's companies have used mergers, spinoffs and tracking stocks over the years to improve focus and efficiency and to obtain tax benefits - and make them more a ttractive to sharehoders.

In September, Liberty split off its video and online businesses including QVC and Bodybuilding.com into Liberty Interactive. In addition to Starz, Liberty Media owns the Atlanta Braves baseball team, holds interests in SiriusXM and Live Nation and a big stake in Barnes & Noble. Starz had been a Liberty Media tracking stock until November.

Richard Greenfield, an analyst with BTIG Research, said in a note in November that he expected that “Liberty is preparing to hard-spin Liberty Starz out of Liberty Media, to enable it to be acquired mid-late next year by a larger media entity. ”