CYPRUS MAIL Thursday, February 7, 2013
13
Opinion
Reprimanding the police for doing their job is a joke THE MOST frequently used response by the government spokesman and AKEL deputies to criticisms of President Christofias was that his detractors were undermining the institution of the presidency. They urged opposition politicians to show respect for the institution, even if they disagreed with the president, because personal attacks against the state’s top official were harmful to the Republic. It was a nonsensical argument which could now be directed at Christofias after his astonishing, public attack on the police for trying to enforce law and order in Paphos on Tuesday. A President of the Republic censuring the police for doing their job not only undermines but demolishes the foundations on which a state is built – respect for the law. This also undermines the institution of the presidency, because when the president publicly reprimands the police for enforcing the law, the top post cannot command the respect of any law-abiding citizen. Police had arrived at the scene of the strike, because striking construction workers were preventing non-striking workers from going to their jobs on a hotel building site. Scuffles broke out when police arrived to restore order and three strikers were arrested for attacking a policeman, causing actual bodily harm, resisting arrest and preventing police performing their duties. Predictably, union representatives accused the police of using ‘excessive force’. Christofias made the following statement about the police: “We do not accept such behaviour. I want to express my solidarity with the people who were beaten and suffered injuries and call on the chief of police to put an end to this behaviour.” Apart from urging the chief of police not to enforce the law, the head of state sided with the law-breakers and ordered an investigation into the police behaviour. But what behaviour did Christofias want the police to stop? Did he not want police to protect the workers going to their jobs because they were strike breakers? Did he not want the police to prevent strikers from blocking the traffic? Perhaps he wanted the police to politely ask strikers to behave themselves and then leave the scene, or maybe he wanted the police to arrest the strikebreakers who were undermining the strike. This is the type of gross irresponsibility we have come to expect from this populist president who has done more than anyone to undermine the institution of the presidency by turning it into a joke. It can only be described as a joke when the head of state publicly reprimands the police for enforcing the law and expresses sympathy for the law-breakers.
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John Malone set to be European cable king F
OR MORE than three decades, John Malone has been known as America’s King of Cable. Now, he is gaining that title in Europe as well. Malone, through his Liberty Global Inc unit, has made his most audacious bet yet on the burgeoning European cable market, striking a deal for about $15.75 billion to acquire Virgin Media Inc, the cable group in which fellow billionaire Sir Richard Branson holds a 3 per cent stake. The deal is Malone’s biggest ever in Europe and puts him in direct competition with Rupert Murdoch, the News Corp chairman who controls Britain’s BSkyB. Liberty Global, which Malone controls with a roughly 40 per cent voting stake despite only owning 4 per cent of its equity, already ranks as the largest cable operator in Europe with 18.4 million subscribers. It also has 1.2 million subscribers in Chile and Puerto Rico for a total of 19.6 million. The company’s position is the result of a decade-long acquisition spree spanning 11 countries from Germany and the Netherlands to Switzerland and Belgium that helped grow Liberty Global into a company with $7.6 billion in revenue and $3.6 billion in operating cash flow from continuing operations in the nine months ended Sept. 30. Virgin Media was created by the merger of cable operators NTL, Telewest and Virgin Mobile in 2006. It will be not only Malone’s largest European acquisition to date, but also one he has been trying to seal for more than a decade. Malone began buying up stock in Telewest and tried several times to acquire NTL at the turn of the century when they were still separate companies. His plan even back then was to merge them. Virgin Media’s 4.9 million subscribers significantly trails BSkyB, the UK market leader,
Newsmaker Liana B Baker and Leila Abboud of private equity firms that have rolled up smaller regional cable operators in Britain and Germany in recent years. For example, Liberty Global in 2011 bought Kabel BW, the third-biggest cable operator in Germany, from private equity firm EQT for €3.16 billion ($4.30 billion). A few years earlier, Liberty Global acquired Germany’s second-largest cable operator, Unitymedia GmbH, from private equity firms BC Capital Partners and Apollo for $5.2 billion, including assumed debt. In Belgium, Liberty in September made a tender offer for the 49.6 per cent of Telenet Group Holding NV it didn’t already own. The bid failed after the group’s management deemed it too low. Liberty currently owns 58.3 per cent of Telenet. Liberty Global also reportedly looked at buying Dutch cable operator Ziggo in 2011, but private equity firms Cinven and Warburg Pincus eventually pursued an initial public offering instead. Liberty Global CEO Michael Fries recently told a Citigroup Inc investment conference that the group would be looking for acquisitions in Europe to both bolster existing markets and enter new ones. “He sees the importance of scale in the business,” said Evercore Partners analyst Bryan Kraft of the rationale behind Malone’s European acquisitions. “He’s been trying to build scale within these markets and also leverage the scale that they bring as a company across all these markets.” The Kabel BW and Unitymedia deals marked Malone’s return to the German market,
‘Malone timed his European buying spree to the exit plans of private equity firms that have rolled up smaller regional cable operators in Britain and Germany in recent years’ which has 10.7 million subscribers. Indeed, battles with BSkyB over access to channels and content, coupled with heavy losses from a network upgrade, forced Virgin Media into a precarious financial situation that prompted a debt restructuring to help it stabilize. The company posted its first annual profit in 2011. Malone timed his European buying spree to the exit plans
which ranks as the second-largest cable market in the world behind the United States. In 2001, he tried to acquire cable assets from Deutsche Telekom and Deutsche Bank, but the deals were eventually blocked by German regulators, forcing Malone into a temporary retreat. Malone’s M&A activity suggests that he is trying to make Liberty Global a Western Eu-
Reclusive American billionaire John Malone ropean cable play. Prior to his buying in Germany and the UK, he sold out of Scandinavia, France, Japan and Australia. ISI analyst Vijay Jayant said expanding in Western Europe gives Malone a more focused strategy in a market with high disposable income. The strategy Malone is pursuing in Europe is essentially the same strategy he used in the United States; take a patchwork of disparate and technologically outdated cable systems, stitch them together and upgrade their networks to leverage their combined power to reduce internal costs and reduced external costs such as programming. That is the model he used to found TeleCommunications Inc, or TCI, which Malone grew into the largest cable operator in the United States before selling it to AT&T Inc. Malone is using that blueprint in Germany, which ranks as Liberty Global’s largest and fastest-growing market. There, Malone is offering TV, phone and Internet bundles with faster speeds and cheaper rates in a bid to steal market share from incumbent Deutsche Telekom. The rationale for the Virgin Media deal appears to be grounded in the TCI model as well. Cable only passes through about half the homes in Britain, so more investment in infrastructure to provide faster Internet speeds could help grow adoption rates. The aggressive tactics Malone used to build TCI prompted former US Vice
President Al Gore to label him the cable industry’s “Darth Vader,” a reference to the popular head of the Evil Empire in the “Star Wars” film saga. The nickname referenced Malone’s power at TCI, which he used to demand equity stakes in cable networks, particularly start-ups, in return for distribution. Malone also fought vigorously against must-carry laws that require cable operators to carry free-to-air broadcast networks like NBC and ABC and, as a matter of course, structures deals to help him pay very low taxes and has a rather well documented loathing of big government. Indeed, Jayant said Malone is likely to leverage Liberty Global to get stakes in channels in Europe in return for carrying them. The company already has programming partnerships with CBS and MGM overseas. Liberty Global also owns Chellomedia, a European producer and distributor of 66 TV channels, including movies, sports, lifestyle and entertainment programming. Malone, the largest private landowner in the United States with about 2.2 million acres to his name, is no stranger to battles with media titans. The reclusive billionaire has faced off with Murdoch numerous times on US soil, at one point acquiring a big slice of Murdoch’s voting position in News Corp that came onto the market unbeknownst to the newspaper baron. Malone eventually leveraged that stake to pry satellite TV company DirecTV from Murdoch.