Malone: Davis Has Brought About His Own Downfall

It’s pay-back time in mogul land.

First, Paramount Communications Chairman Martin S. Davis trashed cable TV executive John C. Malone in an interview in Vanity Fair magazine, saying: “He believes in nothing, he stands for nothing.”

Now Malone has responded, saying: “I’m told that it was an old man venting his spleen basically.” Malone, chief executive of Tele-Communications Inc., also said in an interview Monday that he thought Davis had brought about his own downfall at Paramount, where he has no guarantee of a job after the bidding war between QVC and Viacom/Blockbuster is concluded.

“I think it’s a tragedy for Marty because I think he could have had everything he wanted,” he said. “He could have stayed independent and all that. I think he panicked. He thought (QVC Chairman Barry Diller) was going to come get him, and if he had never done the deal with (Viacom Chairman) Sumner (Redstone), which was an incredibly stupid deal for Paramount, Barry probably never would have been able to come get him.”

Malone also expressed confidence that Diller will prevail on Paramount, saying: “Barry can have it if he wants it. . . . Because the market thinks that Viacom stock with Blockbuster is a turkey. Barry has the deep pockets in this game, so he can win it if he wants.”

At the same time, Malone criticized the planned merger between Viacom and Blockbuster Entertainment, which was engineered by Redstone and Blockbuster Chairman H. Wayne Huizenga.

“Wayne offered to merge with my little Liberty Media this summer,” Malone said. “He is looking for anybody willing to trade real long-term stock for his short-term paper, and he found the guy. At a 20% premium. Now Sumner is all of a sudden saying gee, maybe someone will come and outbid me for Blockbuster. He should be so lucky.”

Malone last October sold TCI to Bell Atlantic Corp. in a $30-billion deal. At the time of the deal, Malone said he was “going fishing,” although he would retain the title of vice chairman and serve as a director of the newly merger Bell Atlantic-TCI.

On Monday, Malone said he intends to remain active in the company, acting as a kind of super-consultant, strategist and scout for joint ventures and new businesses. However, Malone says that independent of Bell Atlantic-TCI he may become a venture capitalist investing in technology companies.

Moreover, Malone said he may become involved in some spinoff technology-based manufacturing companies owned by TCI that Bell Atlantic cannot acquire because of government prohibitions against allowing the Baby Bell in the equipment business.

“I think those rules will go away in three to five years but in the interim I think that is something I would enjoy messing around with,” Malone said.