John Malone: The US billionaire buying up Ireland

The ‘Cable Cowboy’ is America’s biggest landowner. Now he’s snapping up property this side of the Atlantic

 

American billionaire John Malone says he buys land because, reprising the Mark Twain adage, they are not making it anymore. But it’s mostly because he loves being out on the land on horseback.

The 73-year-old chairman of cable television and communications giant Liberty Media recently surpassed Ted Turner, founder of news channel CNN, as the largest landowner in the United States.

Malone, dubbed the “Cable Cowboy,” owns about 2.2 million acres of mostly ranch land and forestry. His properties include more than 5 per cent of the state of Maine in the northeast, according to American magazine The Land Report.

An intensely private person, he is often seen in public wearing his customary fleece wind-breaker and is known for hitting the road every summer for Maine with his wife in a souped-up camper van.

In the past two years Malone has turned his attention to Ireland. He has bought three Dublin hotels – the five-star Westin, the Hilton on Charlemont Place and the Trinity Capital Hotel – and a fourth in Limerick city, the Limerick Strand Hotel on the River Shannon, spending the guts of €150 million. He tried to invest mostly in Dublin because the recovery was faster in the capital.

On the personal side, he is refurbishing Humewood Castle in Co Wicklow, his first post-crash investment in Ireland, as his Irish home. He bought the Victorian pile for €8 million in 2012. Last year he bought the 840-acre Ballylinch Stud at Thomastown, Co Kilkenny, once part of the Mount Juliet estate.

Then in December he stepped into the boots of another media man, Sir Anthony O’Reilly, as the owner of Castlemartin, the eight-bedroom mansion built in 1720 and the 750-acre estate on which it stands. It was O’Reilly’s long-time Irish residence but he was forced out to settle his high-profile debt tussle with publicly owned AIB.

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Malone bought the property for close to €28 million, sending his spending in Ireland in three years towards €200 million.

All this would raise the question of whether the Connecticut-born-and-raised businessman wants to be Ireland’s biggest landowner too.

“I don’t think it fits Ireland,” says Malone in a long telephone interview from Florida where he has a home. “I think we are at about 2,200 acres and that may be enough,” he adds, laughing.

Worth an estimated $7.5 billion (€6.2 billion), Malone invests at this stage in his phenomenal career for love rather than return. He and his wife Leslie, he says, fell for Ireland, the countryside and the people, on visits as tourists and when he attended board meetings – Liberty owns UPC, the cable television provider and biggest digital service in Ireland.

“We thought, well wouldn’t it be fun to have a place there,” he says, speaking in a soft American accent and a considered manner.

The couple looked around and “kicked a few tyres”, until an estate agent presented Humewood. His wife has a love of and flair for restoring historical properties so they grabbed the opportunity.

“It seemed like Ireland at the time was struggling for employment, that there would be lots of available skilled labour if we wanted to take on that project, and so we kind of just jumped into it,” he said.

Malone says the 18-bedroom property sitting on a 500-acre estate will be fully restored within a year.

Humewood brought with it Galway man John Lally, one of Ireland’s boom-time property developers, and former stockbroker Paul Higgins. “They seemed to be pretty much in love with Humewood, as we were,” says Malone. The two Irishmen offered to stay involved in the restoration and the three struck up a friendship.

“I got to know them and I got to see that they were very well regarded as property managers and developers, but that the collapse of the Celtic Tiger has kind of impinged, let’s say, on their personal activities.”

Malone says he jokes with Lally, one of the National Asset Management Agency’s (Nama) biggest debtors, asking him, “When are they going to let you out of the penalty box?” The Galwegian started telling him about investment opportunities in the depressed hotel and and office sectors, which set his financial antennae twitching.

“We were looking for diversification financially anyway, other than media and also internationally,” he said. “It just seemed like it would be an interesting thing to pursue, essentially acquiring these properties from Nama or Nama-control and putting them back into full service.”

Lally and Higgins are now Malone’s Irish partners. Their arrangement is simple: Malone brings the cash and the Irish pair bring the “sweat equity”, the legwork involved in buying and managing properties and businesses that brings them part-ownership.

It’s obvious from hearing him speak that Malone enjoys his financial adventures so far in Ireland. “It has been a fun experience,” he says.

His Irish ancestry – his forebears hailed from Cork – also makes his investments here something of a homecoming. The Irish obsession with land ownership has evidently rubbed off on him.

“My wife says that,” he says. “Well it has always been there in my family. My uncle always told me that he didn’t want anything but his farm and the ones that were attached to it.”

Malone has described his weakness for land as a “virus” he caught from Ted Turner. His main home is on the edge of the Rocky Mountains in Colorado, but his parcels of land are located across the US, including property and forests in New Hampshire and Maine (which he has been visiting since 1982), more than 500,000 acres of ranch land in New Mexico and cattle farms in Wyoming.

“Of course you don’t really ever own the land,” he said. “You are kind of a steward of it so you really want to be a good steward. But it is sure enjoyable while you are on the planet to be able to go walk around or get on a horse or drive a truck around and be out in the open. Ireland just has some of the most beautiful land on planet Earth.”

Horses account for the other side of Malone’s interest in Ireland. His wife loves horses and he loves land, as well as learning about new businesses, so their joint interests brought them into bloodstock.

Mirroring their Irish spending in recent years, the Malones have purchased horse-breeding and training farms in Florida and run their business, Bridlewood Farm, in Ocala, about an hour northwest of Orlando. The farm has produced more than 100 stakes winners and famously trained the 2004 Kentucky Derby winner Smarty Jones.

Bridlewood is mostly a training operation for other people’s horses. There have about 175 racehorses as well as a couple of stallions they own to service the local market. They are also building a “mare band”.

Over in Ireland, Malone had looked at the Mount Juliet resort and Ballylinch Stud next door in Thomastown, Co Kilkenny. He considered buying both but in the end didn’t want the resort; he prefers commercial hotels. He told the owners – the Killeen Group, the motor business founded by the late Tim Mahony – to call them if they were willing to sell the stud on its own. They did and he bought it, giving him and his wife a bloodstock operation straddling the Atlantic Ocean.

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The horse training and breeding business “combines our mutual likes, and in our retirement years it will give us something to do, whether we are in Florida, in Ireland or in Colorado,” he said.

Malone has asked Ballylinch’s managing director John O’Connor to see if there is a role for Castlemartin in their bloodstock business. He is also considering reinstituting cattle-breeding on Castlemartin’s farmland, linking his newly acquired estate up with his US cattle operations in Wyoming and Colorado. This could potentially create a bovine-equine farm on the Kildare estate.

O’Reilly once described Castlemartin as his “spiritual home”. His grandparents and two of his grandchildren are buried next to a medieval church he rebuilt on the grounds.

Remarkably, Malone has not seen the Co Kildare property beyond an estate agent’s brochure, but he knows about the O’Reilly family’s strong connections with the property. “We are not going to keep them out – let’s put it that way,” said Malone.

“A terrible shame” is how he describes O’Reilly’s fall. “[It was] bad timing and bad luck, I would say. You know, shit happens. I think he is a good guy and bad things happen even to good guys.”

Malone and his wife are planning to travel to Ireland shortly with their architect, their “interior guy” and their “horse guy” to check out his newly acquired property and catch up on their other Irish activities.

As he continues to expand his interests into new areas, Malone is conscious of the lesson in the old bloodstock joke: “How do you become a millionaire? Become a billionaire and invest in horses.”

“I am very aware of those issues and financially I am very conservative,” he said. “I don’t use debt. I don’t invest anything I can’t afford to lose. That is what really caught Tony: leverage.”

Despite the country’s own debt-fuelled binge, Malone has a positive view of Ireland and the financial repair work carried out. He praises the pro-business government of Fine Gael and Labour.

“As small as it is,” Malone says, Ireland is “a place where things work.

“The way that Ireland handled the financial pressure that it was under underscores how solid the country is. It wasn’t easy. But Ireland bellied up to the bar, so to speak, and worked its own way through with its liabilities being spread out but honoured. It could have played Iceland but it didn’t. I just think that is a testament to a good solid country.”

Malone has joined fellow US investors such as property magnate Donald Trump and billionaire Baltimore businessman Charles Noell in snapping up Irish mansions and Celtic Tiger-era assets.

Does he regard Ireland as high risk? “Personally, I really don’t care. It is a relatively small part of my assets and I am doing it because I love it, both the financial investment side as well as the personal activity side.”

Having said that, he says he doesn’t regard Ireland as risky. “High risk, in my world, is political or social, not financial,” he said. “If a country is solid, it will work its way through whatever its financial issues are. If a society fragments and the politicians doesn’t have the support of the broad public in running the country, then you have got real issues. Believe me, I have lost a lot of money in Argentina. ”

He notes that with good fortune he hasn’t lost any money in Greece. “When you look across places outside the US where you feel comfortable investing as a US citizen, Ireland comes top,” he said.

Malone points out that he “didn’t really pile into Ireland when it was at the bottom” as others did such as New York billionaire Wilbur Ross or Canadian investor Prem Watsa, who invested in Bank of Ireland.

“We certainly didn’t buy things as deep distressed bargains,” he said. “By the time we decided to buy, it was already well on the path to recovery.”

Malone hasn’t ruled out buying more assets in Ireland, which may interest Nama given that it is selling some that might tempt him. “I look to John and Paul to tell me what makes sense, economic sense, for their sweat equity, what’s their scope, how much they can handle,” he said. “We are still in the market, yes.”

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A Yale graduate of electrical engineering and economics, Malone also has a doctorate in operations research from Johns Hopkins University. He started his career researching at the famous Bell Labs but made his name, and most of his fortune, by turning a small Denver cable company, Tele-Communications Inc, into the country’s biggest cable operator, selling the business to AT&T in 1999 for $59 billion.

He is as canny a dealmaker as he is fierce a competitor. He has taken on Rupert Murdoch with News Corp and last year he mounted a failed hostile bid to buy Time Warner Cable in a $61 billion deal.

Through Liberty, he has held shares in a sweep of media, internet and telecoms companies, from concert group Live Nation to British cable television provider Virgin Media, from shopping channel QVC to Sirius XM satellite radio. Liberty also owns the Atlanta Braves baseball team.

Malone isn’t overly concerned that the new frontier of web streaming services such as Netflix, Hulu and Amazon will lead to a sharp fall in cable subscriptions, Liberty’s traditional business. Customers will, he says, still require high-speed internet, which Liberty provides, for “random access” to online content.

“These things all kind of blur together. It’s difficult to say on balance does it help or does it hurt. I am not sure,” he said.

One area he believes requires major reprogramming is the US corporate tax system. A meritocrat and a libertarian who believes in low taxes and government getting out of the way of business, Malone is critical of President Barack Obama’s vilification of corporations which use the international system to minimise taxes and maximise profits.

Companies are behaving this way because Obama’s administration has failed to create a competitive corporate tax system at home that would encourage companies to stay and create jobs in the US, he says.

“The administration is just setting up this class warfare rhetoric going into the next election where they will vilify people with wealth and corporations as a populist theme that the Democrats will try and keep the administration in power with that theme.”

According to the Bloomberg news agency, Malone escaped a US tax bill of about $200 million – and his shareholders runnings to hundreds of millions of dollars more – by shifting the address of his Liberty Global Inc from Colorado to London in 2013 in a so-called “corporate inversion,” a practice Obama is trying to stamp out.

Malone once said that he earned so much that money didn’t interest him; it was the love of the game that drove him.

“I don’t get mad at my money,” he said. Elaborating, he describes money as “just a measurement system on how you are really doing: are you competitive? To me that is where it is at”.

Even if something will never make a profit, he says, he wants to see it run efficiently. This drives his substantial philanthropic work – in land preservation, in education, in medical research, in animal rescue. “Andrew Carnegie [the Scottish-American industrialist] said one time that if you die wealthy, you should be ashamed of yourself,” remarked Malone.

“You should use your money to do what you regard as good things for your society and your fellow men, and I absolutely agree with that. I also don’t believe in hereditary wealth.”

So does this mean he would consider bequeathing to the Irish State the beautiful properties he is snapping up in Ireland? He laughs. Most of his wealth, between $5 billion and $6 billion, will end up in charitable foundations on whose boards his children and grandchildren will sit.

“I am not a statist; I am definitely a free-market capitalist,” he says. “But it is entirely possible that I would see these [Irish] properties in the hands of good hard-working capitalists and take the capital that I have created – if we have created capital – and use it for a very good philanthropic purpose.”

In other words, he will ride off into the sunshine leaving them to other cowboys of capitalism, just like him.

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