GCI outsources jobs to Philippines, reflecting changed position in billionaire's empire
When telecom billionaire John Malone bought GCI in 2017, the trade journal Fierce Cable said, “Malone is known for crafting complicated deals and creating organizations with complex structures.”
This means he creates business structures that seem impossible to explain to a general audience. I have no doubt that it is in Malone’s interest that things stay that way.
In a story about the GCI plan to export its call center jobs to the Philippines, the Anchorage Daily News said Monday that “the sale of the company to Liberty Broadband of Colorado was completed last year.”
The situation is a great deal more complicated and complex than that sentence suggests.
Put off perhaps by a convoluted maze of transactions and name changes, Alaska news organizations have never presented a full portrait of the twists and turns since Malone made his move four years ago to acquire GCI for $1.12 billion.
Because Alaskans have never been informed otherwise, the image of the company in circulation remains the simple one created by its PR spin, “Alaska born and raised.”
I’ll be the first to admit that I don’t understand the shell games masterminded by the 80-year-old Malone, one of the world’s richest men, dubbed the “cable cowboy” for his success in that business.
Among other things, he owns stakes in Formula 1 Racing, the Atlanta Braves and is the largest individual land holder in the U.S. His net worth grew by $2.3 billion over the last year to $8.1 billion, the Denver Post reported. He has a wide range of companies with liberty in the name.
Malone bought GCI in a $1.12 billion stock deal that closed in March 2018.
The Alaska business became a part of “GCI Liberty,” a branch of the Malone empire that featured holdings in Charter Communications and Liberty Broadband Corp.
Malone, in a tax-free transaction, transferred GCI to Liberty Ventures, Multichannel News reported on March 12, 2018.
“The GCI asset was spun out of Liberty Interactive (now Qurate Retail Group) into another tracking stock (Liberty Ventures) and began trading as GCI Liberty (NASDAQ symbol: GLIB) in March 2018. The stock opened March 12, 2018 at $54.29 each and in the past two years has risen about 54%, closing at $83.62 per share on Aug. 7,” Multichannel News reported on Aug. 10, 2020.
In 2018, there were predictions that GCI Liberty and Liberty Broadband would merge, the trade journal said. And Liberty Broadband announced plans last August to acquire GCI Liberty, a deal that closed in December.
Liberty Broadband holds about one-quarter of the stock in Charter Communications, Inc., the second largest cable company in the U.S. Charter has 30 million subscribers in 41 states. Liberty Broadband’s share of Charter is worth about $35 billion, according to this analysis.
“Liberty Broadband is the product of decades of financial engineering by cable pioneer Dr. John Malone, who effectively controls the company,” financial analyst Mario Gabelli wrote to clients recently.
Malone is chairman of Liberty Media, Liberty Broadband and Liberty Global. He was chairman of GCI Liberty before the merger.
“Liberty's investment in Charter was held in two entities, Liberty Broadband and GCI Liberty (which itself also owned 24% of Liberty Broadband); the two entities merged in December 2020 in a long-anticipated transaction. This ownership rationalization should allow for accelerated share repurchases and an eventual combination with Charter,” Gabelli said.
Barron’s, in a report last year, said “Malone is famously tax-averse and isn't afraid of complex financial structures and debt.”
The position of GCI within his empire is all about complexity. That GCI is a relatively small part of Malone’s empire is one reason why it is easier for the company to transfer jobs to the Philippines, which it would probably have not dared to do when it was an Alaska company.
