DOUGLAS COUNTY — Liberty Media chairman John Malone, in his first public comments since launching a bid for Barnes & Noble, said Monday that the bookseller’s stores will play a key role in its long-term future.
Despite the chain’s struggles amid growing competition from Amazon and other online retailers, Malone indicated he is betting as much on Barnes & Noble’s favorable store locations and lease agreements as he is on the potential sales growth of electronic reading devices and digital books.
“While the stores will shift around in terms of their focus, there will be a physical presence for a long, long time to come, and it will be a profitable physical presence,” Malone said at a special stockholders meeting near Liberty Media’s Douglas County headquarters.
Liberty Media offered last week to pay $17 a share for Barnes & Noble in a deal that values the company at about $1 billion.
“At one point, video, DVDs and CDs were a meaningful part of the business. That space has shrunken dramatically,” Malone said. “From a technology point of view, it’s very important that they keep a product in the game.”
Right now, that product is the Nook, an e-reader that Barnes & Noble hopes can compete against both the Amazon Kindle and Apple iPad. A new version of the Nook is expected to be unveiled today.
Liberty Media chief executive Greg Maffei said Apple’s retail stores could serve as a model for Barnes & Noble outlets in terms of selling e-readers and digital content.
“We’ve seen great interplay between how Apple has been able to drive devices in the stores, and we’d like to think Barnes & Noble is at the beginning of that trend,” Maffei said.
Maffei said Liberty typically makes investments in companies as stand-alone entities and any ability to cross-market products among its portfolio of assets is “icing on the cake.”
“We are more of a pitchman than we are a dictator,” Malone said.
Liberty Media holds stakes in a variety of companies, including Sirius XM Radio, Expedia and the QVC home-shopping network.
“It would not be unrealistic to think that QVC could do very well selling Nooks,” Malone said.
The cable-TV pioneer said Google’s Android operating system, which powers the Nook, will “dominate” the e-reader market.
If the Barnes & Noble board accepts its offer, Liberty Media expects to pay less than $500 million in cash and will finance the rest of the purchase. With Barnes & Noble stock trading above the $17 bid since it was disclosed Thursday, a higher offer could be sought.
“We should know whether we have a deal fairly quickly,” Malone said, adding that it should take at least several months to close the deal.
Andy Vuong: 303-954-1209, avuong@denverpost.com or
