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Malone built cable into empire

One of Colorado's richest started in radio repair at 8

Published February 18, 2009 at 12:05 a.m.

John Malone started building his vast fortune by turning near- bankrupt Denver cable company TCI into an empire with worldwide reach. But his initial stab at business came much earlier, when as an 8-year-old he ran a profitable little radio-repair business with used parts retrieved from a junkyard.

Once referred to as the most influential force in television and the "patron saint of channel surfing," Malone described himself in a 1994 Rocky Mountain News interview as someone who "can hardly exist without a TV set blaring in the background."

His latest maneuver: pouring money into a radio venture on the brink.

Malone's decision to have Liberty Media sink $530 million into Sirius XM Satellite Radio pits him once again against crosstown rival Charlie Ergen, chairman of EchoStar and Dish Network.

Ergen also had been negotiating with Sirius in hopes of taking over a beleaguered provider with a growing subscriber base. Sirius CEO Mel Karmazin rejected Ergen's overture, going with a Liberty deal that allows him to stay in control of the company.

Just last summer, Malone suggested he was exploring ways to work with Ergen on projects. He told the Rocky, for instance, that he and his executive team were exploring joint programming initiatives with the Dish Network.

"The idea of orchestrating cooperation amongst people who otherwise are competitive, it's like mother's milk," Malone said.

But Malone has a reputation for strong-arm tactics, even getting into a legal wrangle last year with friend Barry Diller over the structure of a spinoff of IAC/Interactive Corp., which holds such properties as Ticketmaster and Home Shopping Network.

Malone, now 67, moved to Denver to help cable pioneer Bob Magness transform a debt-ridden Tele-Communications Inc. into the leading industry player.

His strategy for expanding the company involved going after smaller cable markets and leaving construction of costly urban systems to others. He eventually managed to buy those systems at a bargain from operators who spent too heavily in the process of building the infrastructure.

He created Liberty Media in 1991 to hold TCI's cable programming assets and pocketed more than half a billion dollars when stock in the entity took off.

He sold TCI to AT&T a decade ago but retained control of Liberty and continues his penchant for making deals.

Now one of Colorado's richest residents, Malone grew up in a blue collar neighborhood in Milford, Conn. His father, a scientist and engineer for General Electric, worked on early prototypes of the first commercial TV sets.

Said to have an encyclopedic memory, Malone was a gifted student even though he admits he did his homework while watching television. He had dual majors at Yale, and went on to earn two master's degrees and a doctorate in operations research.

He has been described as both soft-spoken or arrogant, making no apologies for his role in shaping the television industry.

"I think there's no question that I have the cable industry tattooed on one of my rear-end cheeks, and TCI on the other," Malone told The New York Times after building the company into a powerhouse. "But I don't think I've been ruthless in anything. I don't think I've driven anybody out of business."

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