March 'Magness' Hits Liberty as Director Quits

A longtime Liberty Media (L Quote) shareholder ended up staying only briefly on its board.

The media and entertainment company controlled by onetime cable mogul John Malone disclosed in a filing Tuesday that board member Kim Magness, a major shareholder of Liberty and the son of Malone mentor Bob Magness, resigned from the board on March 12.

Magness, who joined the board only six months ago, was arrested March 7 on suspicion of narcotics possession, according to Denver press reports. The 50-year-old Magness was found by a police in a hotel room with cocaine, marijuana, hashish and the painkiller Oxycontin, police said.

A message left Tuesday at the office of Magness' attorney was not returned. A Liberty spokesman declined to comment.

Separately, Liberty on Tuesday reported strong bottom-line growth at Discovery Communications, the programming giant in which it holds a nearly 50% stake. Liberty's Starz Encore premium channel service reported fourth-quarter earnings before interest, taxes, depreciation and amortization that met analysts' expectations despite an ongoing dispute with Comcast (CMCSA Quote).

Liberty's shares rose 29 cents Tuesday to close at $10.09.

Magness' departure calls attention to the corporate governance of Liberty, which -- as has been common practice among publicly traded cable-TV companies from Comcast to Adelphia Communications (ADELQ Quote) -- remains under the firm control of its founder and/or founding family, despite its publicly traded status.

As TheStreet.com noted last fall, Kim Magness has a tangled relationship with Malone, who for many years ran Tele-Communications Inc., the cable-TV system giant founded by Bob Magness. After Bob Magness' death in 1996, Malone arranged for TCI to buy back TCI shares held in the Magness estate -- a deal that provoked a lawsuit from Kim Magness. As part of the settlement of that lawsuit, Kim Magness granted Malone an irrevocable proxy to vote Magness' shares in Liberty.