If there has been a common thread weaving throughout Greg Maffei’s decades-long career in the cable, telecom and technology businesses, it is this: broadband.
Broadband, in its earliest and more recent forms, has been the driving force throughout Maffei’s more than 30 years in the industry. Whether it was at Microsoft, where he served as chief financial officer and as chairman and founder Bill Gates’ top deal-maker, or in his current position as CEO of Liberty Media and cable legend John Malone’s right-hand man, high-speed access to the internet has been a common denominator.
Maffei’s career has been diverse. A religion major at Dartmouth, he received his MBA from Harvard University in 1982 and started out initially with investment bank Dillon Read. By 1993, Maffei was at Microsoft, running its investment arm before rising to chief financial officer in 1997. It was there that he helped execute some of the biggest deals in the industry, including the software company’s $1 billion investment in Comcast, and the creation of cable network MSNBC via a joint venture with General Electric.
By 1999, it was evident he was getting pretty good at the job, as another broadband venture, cable broadband service Road Runner, offered him its CEO post. Gates didn’t want to lose his top deal-maker to the upstart and vetoed the move, using a clause in his contract that Maffei had written in himself. “It was very gratifying in one sense and truly annoying in another,” Maffei said of the contract provision that “I had negotiated not for the purpose of shooting myself in the foot.”
After a five-year stint as CEO of 360Networks, a fiber-network reseller that he led through bankruptcy reorganization in 2001, Maffei became co-president of database software giant Oracle in 2005. About four months into that job, Maffei got a call from another old friend, John Malone.
Seeing the Digital Future
Malone was looking for a CEO, after Robert “Dob” Bennett resigned. Malone was not only impressed with Maffei’s well-established deal savvy, but also his expertise on the digital side of the business, a path where both men believed the cable business was headed. “He was perfect for what I was looking for: a very smart guy with a ton of energy, entrepreneurial and aggressive,” Malone said.
Maffei has left his mark on a number of deals since then, including Liberty’s acquisition of a controlling stake in DirecTV in 2006 (later spun out to shareholders in 2009), the merger of XM Satellite Radio and Sirius Satellite Radio and 2013’s purchase of an interest in Charter Communications.
“When you look at the level of deal activity, it has simply been manic over there,” said Buckingham Research media analyst Matt Harrigan, who has covered Liberty in its various iterations for years. “He [Maffei] has done a very good job in identifying which businesses were going to get digitally disrupted and which ones were going to have staying power. The motor never stops.”
The ramifications of Charter’s Time Warner Cable purchase still ripple through an industry where all sizable players are hungry for scale. Meanwhile, Maffei has kept Liberty busy, buying international racing circuit Formula One for $4.4 billion in 2016; and snapping up Alaskan cable and telecom company GCI in 2017, for more than $1 billion.
Maffei said good deal-making follows a simple blueprint: Identify the trends, find attractive spaces within those trends that allow you to capitalize on even larger trends and time the investment correctly. Even the best deals can fall apart with bad timing, he said, using his stint at 360 Networks as an example.
“The trend was that there was going to be a lot more broadband, and we were on the right side of that trend,” Maffei said. “We were absolutely at the wrong time in financing it.”
At Liberty, Maffei came into a company that was really an amalgamation of several different entities — Malone said it’s more like a private-equity investment firm — with interests seemingly scattered all over the cable and communications landscape. With Malone, Maffei helped engineer a series of deals to monetize some stakes, swap others for more valuable assets and in some cases get out of some industries all together. “Liberty was just insane back in the day,” Harrigan said.
Even Malone said the company’s early structure was not for everyone. “There is no question that my thought process is complex,” Malone said. “And he [Maffei] gets it.”
Today, Liberty Media is more streamlined. But it still consists of about a dozen different entities, including SiriusXM Satellite Radio, the Atlanta Braves Major League Baseball team, Formula One Group and smaller interests in the likes of AT&T, Viacom and Live Nation Entertainment, among others.
Outside of the Liberty Media umbrella, there’s Liberty Broadband (which includes Liberty’s 23% interest in Charter Communications); Qurate Retail Group (which includes shopping channel QVC); online travel site Liberty TripAdvisor Holdings; and GCI Liberty.
Many Happy Returns
The returns keep rolling in. At its Investor Day with shareholders in 2018, Liberty said that since 2006 (about a year after Maffei joined the company) composite Liberty Media holdings have grown at a 24% compound annual clip, compared with 6% for the S&P 500 Index and 10% for the NASDAQ Index.
Malone said that while he continues to step away from day-to-day operations, he is still close with his CEO. “We share a coffee pot and his office is right next to mine. We talk all the time. We’re pretty much on the same page.”
Malone and Maffei have different styles: the CEO is more aggressive than the laid-back chairman. But Maffei gets credit from Malone for delivering results. Malone mentioned a phone call he got from Microsoft’s Gates shortly after the Maffei hire to illustrate that point.
“I said, ‘What do you think, Bill?’ ” Malone said. “He said, ‘John, I’ll sum it up for you, he [Maffei] will make you money.’ And he has. I’m a happy camper.”