Liberty Global charts careful course for content deals

(Adds further comments and background)

By Leila Abboud

BARCELONA, Nov 20 (Reuters) - Liberty Global (NasdaqGS: LBTYA - news) , Europe's biggest cable operator, plans to make "small, selective" acquisitions for content which help it make money from its core business of selling high-speed broadband and TV services, its finance chief said on Thursday.

Chief Financial Officer Charlie Bracken said the company had spent only about $300 million in cash on the content deals it had done so far.

In July Liberty bought a 6.4 percent stake in British broadcaster ITV (LSE: ITV.L - news) from satellite TV broadcaster Sky Plc for 481 million pounds ($754 million), but Bracken reiterated on Thursday that the investment was not a prelude to a takeover.

"We want to make small, selective strategic investments in content and you will not see us make dramatic transformative moves for the time being," Bracken said at the Morgan Stanley (Xetra: 885836 - news) Technology, Media and Telecom Conference in Barcelona.

"We have no plans to buy control of ITV."

ITV shares fell 2 percent on Bracken's comments before paring back losses to close at 202.5 pence even though Liberty made similar comments in September, when the shares were at 217 pence.

The turn towards content is a major move for Liberty, which has been a serial buyer of cable companies in Europe for the past decade and comes at a time when telecoms, cable and pay-TV companies in Europe and the United States are encroaching on each other's turf in response to changing customer behaviour and the advent of superfast mobile and fixed line broadband.

Opinions are divided as to whether network operators need to own content, with some like British broadband market leader BT bidding aggressively for TV sports rights and others like mobile giant Vodafone being more wary.

Backed by U.S. tycoon John Malone, who also controls Liberty Media Corp. and Discovery Communications (NasdaqGS: DISCA - news) , Liberty has been growing at the expense of telecom operators like Vodafone and Deutsche Telekom (Xetra: 555750 - news) .

Analysts and investors have questioned whether it should one day buy more of ITV, which has both an advertising-driven broadcast TV business and a content production arm.

A big move into content could alter Liberty's profitability due to the hit and miss nature of the production business.

But Bracken said the amounts he would spend on content deals was not "material" to the group, which earned $13.63 billion in revenue in the first nine months of this year and has a market value of nearly $10 billion.

"We're a distribution company and that will not change," he said. "In the next phase of our evolution, content will play an important role in helping monetise our distribution assets."

Liberty will also seek to expand in content via partnerships. In May, Discovery Communications and Liberty Global teamed up to buy a British television production house called All3Media for an enterprise value of 550 million pounds ($864 million).

Bracken declined to comment on recent press reports that Liberty was negotiating with German broadcaster ProSieben over taking a stake in ProSieben's online video streaming service Maxdome, saying only that Liberty saw online streaming as a promising area and Maxdome as the German leader. ($1 = 0.6378 pounds) (Editing by Mark Potter and Greg Mahlich)