| 11.2°C Dublin

The Punt: John Malone's formula for success


John Malone, chairman, Liberty Media Corp

John Malone, chairman, Liberty Media Corp

Bloomberg News

John Malone, chairman, Liberty Media Corp

Irish American businessman John Malone - who has been snapping up a number of hotels in Ireland - looks likely to become the biggest backer of Formula E, the electric motor car championship.

The 'Financial Times' reported yesterday that Liberty Global Cable group and Discovery Communications, both of which he controls, will become the largest combined shareholders in Formula E Holdings.

And while the sport has yet to break into the mainstream, the paper speculated that the deal could persuade car manufacturers that it is here to stay.

Formula E differs from other sports through its use of electric engines, which can propel the car to a top speed of around 140mph. Conceived in 2012, the sport is already mid-way through its first season.

It looks set to be the latest big deal for the businessman.

He's also been buying hotels in Ireland. In November he agreed terms to buy the Limerick Strand Hotel in the city for close to €20m.

Malone, who controls cable supplier UPC through his conglomerate Liberty Global, has already bought a number of hotels in Ireland over the past three years.

They include the Westin Hotel in Dublin for €60m, the Trinity City Hotel in Dublin for €30m and Humewood Castle for €8m.

Bill Clinton saved my life

Former US Ambassador to Ireland Mike Sullivan has been keeping busy, the Punt sees. He's up for re-election as a non-executive director at US firm Climarex Energy, where the 75-year-old has been on the board since 2010. His reappointment would be for a term up to 2018.

Sullivan, who's a lawyer, also graduated as a petroleum engineer, and was US Ambassador to Ireland between 1998 and 2001, having been appointed by then President Bill Clinton. Sullivan was also the Governor of Wyoming from 1987 to 1995.

Though he was Ambassador to Ireland for just three years, he made a lot of connections here.

From 2001 to 2009 he served on the board of Allied Irish Banks. Between 2003 to 2011 he was also a non-executive director of Kerry Group.

Climarex is involved in resource exploration in Oklahoma, Texas and New Mexico. In the final quarter of last year Climarex was producing an average of 38,246 barrels of oil a day, as well a substantial amount of natural gas.

Sullivan recounted in a 2006 interview how when he did a physical before taking up his ambassador post, he found out he had heart disease. He had a quintuple bypass and three weeks later went to Washington DC to get his ambassadorial paperwork moving.

He credits Bill Clinton with saving his life.

Fielding fumes over pay rises that reduce income

IT is a situation employers say they are coming across more and more often. They try to reward their staff by paying them more, but the quirks of the tax system mean the employee actually ends up with less in their weekly pay packet.

Mark Fielding, the ISME boss, says this is exasperating for employers. He gives an example of single parent who works part time. An ISME-member company wants to give the person an increase of 60c per hour.

This person works three days a week, for seven-and-a-half hours a day. The employer pays €15.29 an hour, but decides to raise this to €15.89.

But the net effect that the take-home pay actually falls by €1.74 a week, despite the staff member earning more per hour after the wage increase, Fielding explains.

Pay-related social insurance (PRSI) is the culprit here. People who earn less than €352 a week are exempt from PRSI.

But as soon as they start going over that amount the charge is levied.

This situation creates a poverty trap where there is no incentive for employees to work longer hours or accept a pay rise.

One for Michael Noonan and Tanaiste and Minister for Social Protection Joan Burton to address in the next Budget.

Indo Business