“John’s very intelligent, with a great knack for deal- making,” said Ted Turner, the man Malone unseated as the top private landowner in the U.S. after buying 1 million acres of New England timberland.

The Virgin Media purchase puts Malone head-to-head with Murdoch in Britain, Germany, and Ireland, where British Sky Broadcasting Group Plc and related companies offer Internet, phone and pay-TV, sometimes delivered on Virgin’s cable systems.

The two tycoons go way back, and Murdoch was one of the first people Malone contacted when the Virgin Media acquisition was announced. Malone characterizes their relationship as friendly and says Murdoch has phoned him in the past to give a heads-up when they come into corporate conflict. Murdoch declined to comment.

In 1987, Malone helped a growing News Corp. out of a jam when Murdoch had trouble refinancing debt from previous deals. Malone arranged a $300 million bridge loan and introduced his friend and business rival to various bankers to get him “over the hump,” Malone said.

In return, Murdoch sold Malone preferred stock in News Corp. Malone says he made money on the deal, though he declines to say how much.

“The perception of two old guys duking it out isn’t accurate,” said Claire Enders, chief of Enders Analysis in London.

Offloading Debt

Since Vodafone outbid him in Germany last summer, Malone has said he’ll turn his focus to southern Europe, where cable companies are still up for grabs. That’s not a bad strategy, according to Leopold Salcher, an analyst at Raiffeisen Capital Management in Vienna, but the countries are smaller and consumer spending power is weak compared to Germany.

“Losing the battle for Kabel Deutschland was certainly a setback for Liberty since Kabel is a great asset in a big country,” Salcher said. “Southern European countries won’t be nearly as lucrative.”

Part of Malone’s strategy is offloading liabilities onto acquisition targets -- a maneuver that has led to losses at some subsidiaries. On June 17, a week after Liberty Global closed its acquisition of Virgin Media, Fitch Ratings downgraded Virgin’s debt, citing expected higher leverage under the new ownership.

“It’s risky because it’s carrying so much debt,” said Michael Dunning, the head of Fitch’s European technology and media team. European cable companies, though, should be able to handle the higher leverage because they can charge higher rates after spending billions on new technology.