Rupert Murdoch could be forgiven for waking up on Tuesday morning and remarking: “Not him again.”
Almost a decade ago, John Malone, the American cable TV billionaire, bought his way into Murdoch's News Corp empire, building up a hefty 16-17 per cent stake which the owner of The Times and The Sun newspapers eventually traded for a controlling stake in the Direct TV satellite television business and other assets as he sought to defuse a potential takeover bid for his media conglomerate.
Now, Mr Malone, who was once nicknamed Darth Vader by Al Gore for his stranglehold over the US cable business, is approaching Mr Murdoch from behind, with his Liberty Global announcing a takeover of Virgin Media, the second largest pay-TV business in the UK. That would put him in direct competition with the country's largest pay-TV business, BSkyB, which, if you were living in Antarctica and somehow missed the controversy over News Corp’s bid to buy up all of the business in 2011, counts Mr Murdoch as its biggest shareholder.
Although the two men have similar interests, they couldn't be more different in the way they do business, with Mr Malone known for giving little away, in contrast to Mr Murdoch, who recently signed up to Twitter, directly broadcasting 140-word pellets of wisdom and invective to an audience that at the last count stood at more than 400,000. Everyone has an opinion about Rupert Murdoch. But barely anyone outside the cable industry has heard of John Malone.
Born in 1941 in Milford, Connecticut, Mr Malone banked a series of degrees and completed a stint with McKinsey & Co before moving to General Instruments, working in a unit that made cable TV equipment. That led to a meeting with a Texas rancher called Bob Mangess, who'd set up Telecommunications Inc, or TCI, a cable distribution business.
Until Mr Malone's arrival in the early 1970s, TCI had found little success. Loaded with debt, it was struggling. Young John Malone went about fixing the firm – and how. Via a series of deals bringing together a host of small cable providers, he turned TCI into a behemoth that eventually reigned as the single largest cable TV operator in the US.
His knack for deal-making was on display again in 1999, when he sold TCI to A&T for around $50bn (£32bn). The sale made Mr Malone very, very rich, earning him billions – but he wasn't suited to working inside a mega-conglomerate like AT&T. In time they parted ways, with A&T spinning off Liberty Media, the television programming arm of TCI, and Mr Malone stepping down from the telecoms giant's board to steer the demerged ship in 2001.
Today, Mr Malone is in charge of Liberty Media Corp, which owns a host of cable channels, Direct TV and the Altanta Braves baseball team among a host of other assets, and Liberty Global, a sprawling international cable business boasting more than $10bn in revenues that is already a big fish in Europe, operating in 11 countries, from Ireland to Romania, across the continent.
All told, as of the end of September, Liberty Global has nearly 20 million customers. London serves as the headquarters of Chellomedia, a programming business which, among other things, manages six UK entertainment channels.
Buying Virgin - for which Liberty will pay around $16bn in stock and cash, under terms announced late last night - would give Mr Malone an entry into one of the biggest cable markets east of the Atlantic. Including debt, the deal would be worth $23bn.
While the takeover will open up a new market for Liberty as it exists today, Mr Malone is familiar with the terrain. Virgin came about when the Telewest cable business, in which Mr Malone once owned a sizable shareholding before selling out in 2004, merged with Virgin Mobile in 2006. Sir Richard Branson, who was instrumental in putting together the deal, continues to own around 3 per cent of the group, which, after struggling in the early years, has grown by focusing on delivering bundled services combining TV, broadband and mobile phone contacts.
"Virgin Media is doing quite well at the moment," Sir Peter Bazalgette, a former director of Channel 4 and incoming chairman of the Arts Council, said. "They've got nearly 4 million households and they've got 1.1 million TiVo households to increase Arpu [average revenue per user]. They've not extended the number of households but TiVo quite cleverly … They're also embracing NetFlix and LoveFilm, which is very shrewd, instead of seeing it as a threat, which makes Virgin less of a closed system. Neil Berkett [the chief executive brought in to turn things around in 2008] has done a very clever job."
The recent successes and period of stability make Virgin Media the perfect springboard into the UK market for Mr Malone. "I think this deal is long overdue for Liberty Global," Ynon Kreiz, former boss of the Big Brother TV company Endemol, said. "Virgin is the missing piece in the jigsaw puzzle. They're already big in Germany and you cannot be a big international player without a foothold in the UK."
With the takeover agreed last night, Mr Murdoch will no doubt be watching closely as Mr Malone puts his imprint on Virgin.