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Liberty Media (LCAPA) |
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WIKI ANALYSIS
Liberty Capital (NASDAQ : LCAPA) is one of three tracking stock groups belonging to the Liberty Media Corporation. Liberty Media is a holding company that invests mainly in the video and online commerce, media, communications and entertainment industries.[1] LCAPA represents the holdings that are in the video programming and communications technology, and services involving cable, satellite, and the Internet.[2] Its major holdings include Starz Media, the Atlanta National League Baseball Club, Inc. (ANLBC), TruePosition, and its stakes in Time Warner and Sprint Nextel.[3]
Business Segments[4]
Liberty has three reportable operating segments.
- Interactive Group (81.8% of total revenue): This segment operates QVC, Bodybuilding.com, Lockerz, and other subsidiaries. It also invests in companies like Expedia (EXPE) and Live Nation (LYV).[5]
- Starz Group (11.9% of total revenue): This segment operates Starz Entertainment and Liberty Sports Interactive.[5]
- Capital Group (6.4% of total revenue): This segment owns Starz Media and the Atlanta Braves. It also invests in Sirius XM Radio (SIRI) and Time Warner (TWX).[5]
Key Trends and Forces
Many of Liberty Capital's Assets are Publicly Traded and Cannot be Controlled by Liberty Capital
Liberty Capital has a large public equity ownership in other companies, so the value of its tracking stock follows that of its subsidiaries and other companies in which it holds shares.[7] The value of its stock depends on the success of its subsidiaries, of which the largest was Starz Entertainment, which was moved to the Liberty Entertainment tracking stock.[8] Liberty Capital has been selling those of its investments that are not controlling or bringing in significant revenue, instead opting to buy full ownership of companies, such as Starz Media and the ANLBC.
Liberty Media's Goal to Make Itself Into a Operating Company May Run Into Difficulties
Liberty Media is currently trying to change from a holding company to an operating company by aiming towards attaining full ownership of smaller companies and liquidating some of its less strategic holdings, such as trading a non-controlling 16.3% share of News Corp for a 48% ownership stake in DirecTV.[9] Liberty Media made a deal with News Corporation (NWS) for 39% control over DirecTV. In April it bought an additional 78.3 million DirecTV shares, increasing its ownership stake to 48%.[10]
A main strategy of running a holding company is so that Liberty Media can organize its diverse business units into separate tracking stock groups. Liberty Capital has problems it must address while becoming an operating company, such as having to control the operations of all its holdings, setting business strategies for each, etc., which is more effort-intensive.
Rapid Technological Changes Affect TruePosition's Technological Standing
Liberty Capital's holdings are subject to the advancement of the technology used, especially for TruePosition, which locates wireless devices. At the moment AT&T (T) and T-Mobile are using TruePosition's technology, but if another company developed a better technology, TruePosition would suffer.[11] Liberty Media also depends on the sales of its home videos for its revenue, and the physical format (video cassette, DVD) affects revenue.
Performance of Atlanta Braves Affects Revenue Earned By ANLBC
Liberty Capital has a 100% ownership of the Atlanta National League Baseball Club, Inc., which owns the Atlanta Braves and leases their home field, Turner Field. ANLBC earns its revenue from the sale of tickets and concessions at Turner Field. The amount of revenue it earns depends on the success of the Atlanta Braves, which for the past 17 years have won 14 divisional titles, five National League pennants and one World Series.[12]
Competition
Liberty Capital's businesses in the video and online commerce industry compete with other online and offline retailers. The principal competitive factors in the market are brand recognition, the quality of the products, price, customer satisfaction, etc.[13]
In the television programming industry, Starz Media has to compete with other television programmers for airtime on a limited number of channels.[14] It also faces competition from other home video distributors. Starz Media's animated films compete with those of better known names, such as Disney, Pixar, Dreamworks, and Twentieth Century Fox.[15]
The Anchor Bay Japanese animation home video distribution company has to compete with several other home video/DVD distribution companies such as VIZ Entertainment, GoodTimes Entertainment, Lyrick Studios and Sony Wonder.[16]
TruePosition competes with @Road, QUALCOMM, Remote Dynamics, Teletrac, and Xata . Its biggest competitors are @Road, QUALCOMM and Teletrac, all of which develop tracking technology as well, although Teletrac and @Road have slightly different systems that locate trucks and autos.[17]
References
- ↑ LCAPA 2007 10-K, Item 1: Business, Page 1
- ↑ Morningstar Analysis: LCAPA: Liberty Capital Analyst Report
- ↑ LCAPA 2008 10-Q, Page 9
- ↑ LCAPA 2009 10-K pg. II-10
- ↑ 5.0 5.1 5.2 LCAPA 2009 10-K pg. II-5
- ↑ LCAPA 2009 10-K pg. II-5
- ↑ LCAPA 2007 10-K, Item 1A: Risk Factors, Page 28
- ↑ Morningstar Analysis: LCAPA: Liberty Capital Analyst Report
- ↑ Morningstar Analysis: LCAPA: Liberty Capital Analyst Report
- ↑ 04/03/08 Liberty Media Purchases Additional 78.3 Million DIRECTV Shares
- ↑ LCAPA 2007 10-K, Item 1C: Narrative Description of Business, Page 10
- ↑ LCAPA 2007 10-K, Item 1: Business, Page 9
- ↑ LCAPA 2007 10-K, Item 1C: Narrative Description of Business, Page 26
- ↑ LCAPA 2007 10-K, Item 1C: Narrative Description of Business, Page 26
- ↑ LCAPA 2007 10-K, Item 1C: Narrative Description of Business, Page 26
- ↑ LCAPA 2007 10-K, Item 1C: Narrative Description of Business, Page 26
- ↑ TruePosition, Inc.
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