Good day, and welcome to the Liberty Media Corporation Quarterly Earnings Conference Call. Today’s call is being recorded. This call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about financial guidance, business strategies, market potential, future financial performance, new service and product launches, the anticipated split off of the Liberty Capital and Liberty Starz Groups and other matters that are not historical facts. These forward-looking statements involve many risk and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements including, without limitation, possible changes in market acceptance of new products or services, competitive issues, regulatory issues, continued access to capital on terms acceptable to Liberty Media, and the satisfaction of the conditions to the proposed split off. These forward-looking statements speak only as of the date of this call. And Liberty Media expressly disclaims any obligation or undertaking to disseminate any update of revisions to any forward-looking statement contained herein to reflect any change in Liberty Media’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. On today’s call we will discuss certain non-GAAP financial measure, including adjusted OBIDA. The required definitions and reconciliations, preliminary note and Schedules 1 through 3 can be found at the end of this presentation. And at this time, for opening remarks and introductions, I would like to turn the call over to the President and Chief Executive Officer Mr. Greg Maffei. Please go ahead sir.

Thank you. Good morning to all of you, and thank you for your continued interest in Liberty Media. Today on the call we have with me our Controller, Chris Shean, QVC CEO Mike George, Starz CEO Chris Albrecht, and other executives are available. I’m going to start on Slide 3 highlighting our second quarter events that we thought were noteworthy. It was a very solid quarter driven by strong operating performance across our operating businesses and good work by our management teams. At Liberty Interactive, QVC again displayed strength in its operations. The U.S. OBIDA margin was 25.4%, the second highest in the company’s history. We continued Internet growth at the business. QVC.com revenue grew 21% year over year and makes up now 32% of U.S. Sales. We also experienced good international results despite the strength of the U.S. dollar. Our e-commerce companies posted 15% revenue growth, which are strong results given the choice we made to change our non-transaction revenue programs, NTR, that those choices reduced the revenue and more dramatically impacted our adjusted OBIDA. We expect that change will continue to impact revenue, and even more dramatically OBIDA, for the balance of 2010 as we previously have discussed. We also, at Liberty Interactive, continue to strengthen the capital structure; reducing debt and extending maturities. We retired $479 million principle amount of our 5.7% 2013 bonds through tender and open-market purchases as of July 26th. At Liberty Starz we had solid results despite a substantial programming write-down. We continue to see positive sequential trends in subscribers. In July, we successfully premiered Pillars of the Earth. We’ve also announced the prequel for Spartacus and are happy to carry on with this very successful series. And we reached a comprehensive new affiliation agreement with Comcast, our largest distributor. At Liberty Capital,…

Thanks, Greg. Liberty Interactive Group’s revenues increased 6% to $2.1 billion in the second quarter, while adjusted OIBDA increased 4% to $428 million. QVC, the primary driver of results amongst the Liberty Interactive attributed assets, increased total revenue by 5% to 1.8 billion, while adjusted OIBDA increased 9% to $403 million. Liberty Interactive’s other e-commerce businesses grew revenues 15% of the quarter. Most of the e-commerce company’s posted an increase of revenue, however, overall revenue growth was partially offset by lower commission revenue earned when customers sign up for third-party online discount services. That’s the NTR that Greg was referring to. During the first quarter, we made the decision to change the way that we handle those particular promotions, and these changes, as he mentioned, are expected to continue adversely impact revenue -- commission revenues throughout 2010. Adjusted OIBDA for the e-commerce businesses decreased 36% from second quarter and represented 9% of revenue in 2010 as compared to 70% in 2009. Revenue earned from the commissions have significantly higher margins than normal product sales and therefore the reduction in this revenue more negatively impacted adjusted OIBDA on a percentage basis. Furthermore, increased marketing expenditures helped grow revenue in new customer names during the quarter but negatively impacted the adjusted OIBDA margin. In addition, more cost were incurred associated with our two startups; and given the stage in their operations, very little revenue at this point. All of these negative impacts offset product-related adjusted OIBDA growth that was achieved by our e-commerce businesses. Now, let’s take a quick look at Liberty Interactive’s liquidity. At the end of first quarter, the group had attributed cash in public investments of $3.4 billion and 7 billion in attributed debt. In the second quarter Liberty Interactive completed a successful tender of its 5.7% 2013 bonds, and through this tender and subsequent open-market purchases through July 26, $479 million principle balance of these bonds had been retired. QVC’s total debt-to-adjusted-OIBDA ratio as defined in QVC’s credit agreement was approximately 2.4 times as compared to a maximum allowable leverage of 3.75 times. QVC’s gross leverage is down significantly from its peak in 2008. Now with all that background, we’ll hand it over Mike George for additional comments specifically on QVC.

Thank you Chris. I’ll provide some additional detail on our results in each market and then conclude with some general comments about our directions. In the U.S., we grew revenue 4% and adjusted OIBDA 10%. We were very pleased with our revenue growth in light of a more difficult economic environment, and we drove a significant increase in adjusted OIBDA yield. We saw outstanding results in our kitchen, cooking and dinning, and household categories, as well as continued strength in accessories. Consumer electronics slowed considerably, consistent with the industry-wide slow down in the CE sector. Given the slower margins however, this had a greater impact on the top line than on the bottom line. Our U.S. e-commerce business continues to outpace overall internet retail sales with growth of 21%. QVC.com now represents 32% of the U.S. business, up 5 points from last year. That’s the second highest quarterly jump in web penetration that we’ve ever achieved. And products that have not been featured on air recently are now over half of our e-commerce business; evidence that we’re capturing incremental purchase occasions on QVC.com. We continue to add new customers in the U.S. at a strong pace, and revenue from new customers increased 17% in the quarter; our fourth consecutive quarter of double-digit growth from new customers. We reduced inventory levels 10% from the prior quarter, putting us in a good position to chase hot product categories in the fall and holiday season. And unlike most other retailers, we did not need to turn to heavy markdowns to bolster the sales line. Our 150 basis points increased in adjusted OIBDA yield was driven by improvements in initial product margin, reduction in freight and obsolescence, and tight expense control. We also successfully completed the renegotiation of our agreement with GE Money Bank,…

Let’s take a look at Liberty Starz. Liberty Starz attributed revenue grew 4% in the second quarter to $311 million while adjusted OIBDA decreased 1% to $103 million. At quarter end, Liberty Starz had attributed cash and public holdings of $1.1 billion and attributed debt of 46 million. With that summary, I’ll now have Chris Albright comment specifically on Starz Entertainment and Media.

Thanks, Chris. Good morning. Starz Entertainment had another strong performance in the second quarter, marked by solid quarterly revenue results and a second consecutive quarter of subscriber gains on both Starz and Encore. Also, as Greg mentioned, we entered into a new multi-year affiliation agreement with Comcast. Revenue with Starz Entertainment of 308 million represented an increase of 4% in comparison to the same quarter from a year ago. Adjusted OIBDA grew by 2% in comparison to the second quarter of last year to 107 million. The average number of Starz subscription units decreased by 3% in the second quarter of 2009, but increased by 200,000 units for the second quarter of 2010 versus the first quarter of 2010. The average number of Encore subscription decreased by 1% in the second quarter of 2009, but increased by 800,000 units for the second quarter of 2010 as compared to the first quarter of 2010. Of this increase, approximately 80% of it comes from fixed-rate deals. Despite continued levels of economic uncertainty for consumers, the value proposition of our channels and services have proved resilient in the marketplace and has driven our business performance. At the end of the second quarter, we announced a new multi-year agreement with Comcast that consolidates our prior separate Starz and Encore affiliation contracts into one new and more comprehensive arrangement. The new agreement extends and expands our business relations with Comcast for all of Starz Entertainment channels and advanced services. Of note, Comcast has introduced all three of our authenticated online services; Starz Online and Encore Online, and the newly launched Movieplex Online service. We’re actively engaged in discussions with other affiliates regarding similar TV-everywhere initiatives. Shifting over to Starz original programming, we’re pleased to note the solid performance of the Pillars of the Earth, which…

Thanks Chris. Let’s take a quick look at Liberty Capital. During the quarter Liberty Capital revenue increased 1% to $200 million while adjusted OIBDA was a negative 59 million. The Liberty Capital Group has attributed cash and public investment and 7.6 billion and attributed debt of 2 billion. From May 3 through July 30, 2010, Liberty repurchased 8 million shares of LCAPA common stock at an average price of $43.11 for total cash consideration of 344 million. Cumulative repurchases since the reclassification of this tracker represent 34% of the shares originally outstanding. Now with that, I’ll turn the call back over to Greg.

Thank you Chris. And thank you Mike and Chris for your updates on the respective businesses. We feel that our businesses posted good operating results in the face of a challenging consumer economy. We don’t expect that that uncertain economic -- macroeconomic environment is likely to change in the near term, but our management teams will stay focused on the factors under their control. At Liberty Media, we are going to continue to make progress on the spilt-off of Liberty Capital and Liberty Starz. At Liberty Interactive we’ll continue to have focus on excellent execution at QVC and e-commerce companies. I note a couple of points; the e-commerce companies continued to gain share in their respective businesses, which may have been masked by the change in the NTR programs, but the underlying strength in the businesses was good. And at QVC, I was pleased with the new [inaudible] growth, but the progress that we’re making at QVC Italy and the continued growth of the Internet elements of the business. I’d also note that we will continue to reduce debt at Liberty Interactive in part because of the program that Mike George outlined regarding our new credit card facility. At Liberty Starz, we’re also going to continue focusing on operational excellence, and building cost-effective original programming using a strategy to differentiate our channels with the benefit of our distribution partners and the end consumers. We’ve made tremendous progress regarding the 2011 schedule as Chris Albright noted. And as I mentioned before, we’re very focused on what to do with the large cash balances at Liberty Starz. We are determined to come up with an effective use of that capital. At Liberty Capital, we have the same element; a large cash balance that we’re very focused on what is an effective use of capital there. You’ve seen it part, our continued share shrink, as we believe the shares are attractive. We also believe we’ll benefit from the continued growth of Sirius XM, and we’ll focus on rationalizing our non-core holdings. So with that, let me thank you for your continued interest in and support for Liberty Media. We hope you’ll stay tuned for the next quarter, and we’ll open it up for questions. Operator?

Thank you. (Operator Instructions) Up first is Barton Crockett with Lazard Capital Markets. Barton Crockett – Lazard Capital Markets: Okay, great. Thank you for taking the question. I was wondering if you could at first address interactive. And I noted your comment that you’re looking to launch second channels in some of the countries abroad. I’ve also noted that HSN is looking to launch a second channel here in the U.S. I was wondering if you could talk a little bit about why you’re launching second channels abroad, and you know, if there might be an opportunity to do something like that here?

I’ll let Mike comment on that. But I would note that the structure of many of these other markets in terms of what distribution, what it takes to get incremental distribution, the cost and the scale, is very different, particularly in the U.K. or other markets with DTT. There are lots of more cost-effective ways potentially to achieve incremental distribution. But I’ll let Mike comment particular on the U.S. market.

Yeah. Of that state of that, the reason we chose the U.K. and Germany for the second channel is exactly as Greg mentioned; relatively low costs to get incremental distribution. These will be largely recorded -- previously recorded content, some original content, but largely leveraging content off the main channel. U.K.’s second channel will focus primarily on beauty and Germany will be more mixed, but with a heavy focus on beauty. You know, we think these take channels provide modest revenue potential, so I don’t want to overstate the impact. And the key is to be able to do it at a very low cost. In the U.S., we may at some point explore second channels, but I would say it’s a little bit lower down on our priority list just because, again, the equation for us in terms of amount revenue potential relative to cost and caliber of the distribution is such that it’s not as clear cut of case as it is in the U.K. and Germany. So we’ll watch those two markets. We’ll learn and optimize in those two markets, and at some point we may consider bringing it to the U.S., but that’s unclear at this point.

Barton, I’d add, as Mike as noted in his comments, I mean, one of the ways that we’re trying to grow this business is to extend the franchise and the value of the QVC name across many platforms. That could include incremental channels, or it could include increased Internet penetration as you’ve seen, or experiments as we are in the U.K. with ITV broadcasting us late at night on a segment. You know, where we’re not launching a new channel, but in effect we’ve getting air time on one of the traditional main channels, broadcast channels there, and an interesting experiment. So we’re always looking for ways to do that because as Mike noted, cost effectively. Barton Crockett – Lazard Capital Markets: Okay, great. And then if I could ask a question about the Starz Tracker. I was wondering if you could detail the one-time hit from the shutdown, you know, expenses for Party Down in Gravity. And then if you have any comments about your ability, you know, going forward to cover your investment in new originals by reduced spend on things like movies from Overture. You know, perhaps the benefit from less fewer films coming out of your big output deals with Disney and Sony.

So I’ll let Chris Shean comment first on the write down.

Yeah, the charges for Starz Entertainment for those two series that were shut down was almost $5 million, close to it, rounds to it.

You want to go ahead, Chris, on the –

Sure. With regard to whether or not we’ll be able to fund the accelerated output of original programming, clearly our goal is to drive the value of the Starz businesses and original programming is an important way to create more valuable and differentiated brands. And not only do we need to create the programming, we need to be able to fund the marketing of those programs. We think that we’ve come up with some interesting ways to approach how to fund those programs. As I’ve said before, we’ve talked to potential partners. Climates change with regards to the ancillary value of a lot of that program, so we’re focused on not the programs themselves, but how it can continue to drive Starz’ growth in the near term as well as the long term.

But I’d add, Barton, to Chris’s point, you noted that longer term, many of these deals, these output deals that we have a lower cost structure and that does create opportunity for us. It’s a challenge for us on a revenue side to make sure we are growing both RPU and subscriber count, but the opportunity on the cost side that’s opened up by both lower spot prices, fewer programs, or rather films produced by the majors, and the structure of the new deals creates room to either reinvest in an original or bring incremental margin to the bottom line. And that’s our goal, Chris’s goal, the advancement team at Starz goal, to mediate between those two positive attributes. Barton Crockett – Lazard Capital Markets: Okay. That’s great. I’ll leave it there. Thank you.

Next up we’ll hear from James Ratcliffe with Barclays Capital. James Ratcliffe – Barclays Capital : Good morning, folks. Thanks for taking the questions. One related to Starz, and one related to sort of a Liberty overall view question. When you talk about rights and doing collaborative deals, what sort of rights of specific are you really targeting? Is it just U.S. pay TV, or are you interested in say U.S. DVD, later on streaming in the like? And Greg, a more general one. When you look at buy backs, now you clearly were aggressive about LCAPA, not so at Liberty Starz this quarter. How much of that is a Liberty Media overall view that you think this is how much of the say Liberty Media LLC cash we’re willing to devote, and then you look at which tracker looks cheapest at the moment and how much of it really is a -- do you think of it on a cash balance by individual tracker basis?

After you, Chris.

With regard to the rights on the Starz programming, certainly pay television rights are important, but with the way these services are packaged we need to also retain the digital steaming rights. So those are ones that are crucial to us being able to do our business. With regard to the other rights, we look at them both globally and as a case-by-case basis. As I said, the ancillary markets have changed and we’re going to try to make the best decision based on the analysis of the value of those rights with regard to the slate and each individual programming as we go forward.

James, on the second part of the question regarding cash balances, while there obviously is shared responsibility ultimately for the debt, we’re very comfortable with the equity values and that really has become a non issue. We let each of the trackers ride on its own bottom when thinking about equity repurchase decisions. The Board affirms that’s, thinking with its head as if it were the Board representing Liberty Starz, or Liberty Capital, or Liberty Interactive. So I think we think of them each individually. James Ratcliffe – Barclays Capital : Thank you.

Deutsche Bank’s Doug Mitchelson is up next. Doug Mitchelson – Deutsche Bank: Thanks very much. So Greg, I’m actually not going to ask you a Liberty Capital question, this quarter. So that’s something. So on Starz, a couple of questions for Chris or Greg. I think one is, was the growth the last two quarter, quarter-over-quarter for subscribers coming from your fix-rate contracts or the contracts where you’re paid per sub? I know last year you sort of had the positive where it was the fixed rate contracts where we lost subscribers. But what’s that impact on the first two quarters? That’s the first one.

Well, the growth came from both fixed rate deals and I’ll let Bill Myers, who’s the President over at Starz Entertainment give you specifics. He’s got the numbers in front of him, and his glasses on.

Yeah, on the Starz side, this is just for the last quarter. We have been growing subs in our consignment side. So basically what we’ve done in this last quarter is since we did our Comcast deal, they’ve taken advantage of the deal and pretty much all that growth has come out of fixed-rate deals in the last quarter. Doug Mitchelson – Deutsche Bank: Okay, that’s clear. Thank you. And then maybe, Chris, to help us with this TV budget issue, the way to go about it is, can you give us a sense of where the TV programming budgets for Starz was in 2009 and where it’s coming out in 2010? And then we can sort of make some guesses where you might go into 2011 and beyond. You know, a percentage of programming costs, or the dollar basis.

Yeah, programming cost percentage. Well, we’re increasing -- I don’t have the numbers. Doug Mitchelson – Deutsche Bank: It’s probably easier to do it by hours, isn’t it?

Yeah, we’re ramping up to hopefully around 70 hours of programming a year. That is a significant increase over what Starz has done before. I would say that although that increase is probably a multiple of three or four, it will represent an increase in the original programming spend, probably double the original programming spend. And depending on how we look at the marketing, that number will fluctuate.

But I can say if there’s relucence here, Doug, that’s exactly why. We have been focused on, as Chris noted, several ways to take some of these costs, share them with partners, look at innovative ways to handle that. So we know what the target, what we want to get done on the amount of original program we believe is helpful if not critical to differentiate the channel. How exactly it will be costed out, you know, how we will pay for it and how much we’ll float to the income statement is still the question.

Yeah. And I just want to re-emphasize that we’re committed to maintaining the growth at Starz and not having the investment in original programming change the trajectory of that growth. Doug Mitchelson – Deutsche Bank: Got you. And then last question, this one is going to be a little bit dicey. Disney indicated that it’s protected on any renewal with Netflix and that it would participate in growth in that digital revenue stream that you might receive at Starz. Can you help us understand, is that a simple revenue share over a certain, you know, fixed point, or is that a cost per stream? There’s a lot of debate about how you might approach the contract and I know you’re not going to give us, you know, anticipate what that contract might be, but the nature of whether it’s per stream or just a simple revenue share would be helpful.

Rejected in the since that we have structured a deal that kind of maintains the premium nature of the service, and that above a certain number of Internet subscribers, they get an incremental -- they get the license fee above that. So there’s a certain number of subs that we get free and then above that they can play on a incremental-fee basis.

Look, I know that the Nexflix deal is a relatively short-term deal, was we’ve noted. It was a tap in the marketplace, and we’ll see how that evolves. It’s logical that our partners would participate in growth in that Internet business at some point and we structured a deal. We hope it’s a good partnership with Disney to do that. Doug Mitchelson – Deutsche Bank: Right. Okay. Thank you.

Next we’ll take a question from Matt Harrigan, Wunderlich Securities Matthew Harrigan – Wunderlich Securities: Good morning. Thanks for taking my question. Firstly, you noted that you had more new customer activity at Q. I did notice that you were a little bit more visible in the image advertising side at the World Cup and Wimbledon, and I’m curious if your thinking is evolving in terms of the efficacy of more marketing for Q to introduce it to new clients. And then my second question just relates to the deal you announced using Ensequence for EBIF and what the upside for Q is there. And then lastly, on Liberty Starz, when you look at, you mentioned you retained the rights for home entertainment for Camelot, when you look at a fairly successful series, some of the HBO shows over the years, what would be the home entertainment potential for a mild hit, or a break-out hit? I would assume that those are real dollars. If you could just put a broad collar in quantifying that.

Mike, maybe you can comment first on Q.

Sure. On the marketing side, you know, I would say our view that traditional TV and print advertising does not have a strong ROI associated with it, that view still holds. From the light of what you say, the recent advertising, I would note that all of that came at no cost to QVC and as part of our long-standing affiliate agreement for by they provide us with some airtime. So I think that says we’re doing, you know, a better job of how we get that airtime and the caliber of the advertising. But all of that is at no cost to QVC. You know, that said, I would say that our marketing activities continue to pick up but generally what we find is most effective is things that drive heavy levels of PR, and we do a lot of event-based activities that draw celebrities, draw PR attention. And we are carefully wrapping up our online spend as we, you know, fine tune the ROI models for where we can play in Internet-based advertising. So I think it’s fair to say you’ll see a -- I hope you’ll see a continued pickup in visibility of QVC but it will not result in a significant increase in paid marketing, which we continue to believe for the most part is not highly advantageous for us. On the Ensequence deal, I should now that Ensequence announced -- made an announcement, QVC has not made any announcement about that. But nonetheless, you know, as that announcement indicated, we are looking at launching an interactive shop-by-remote application in the U.S. We’ve had one in the U.K. for about ten years. And as I’ve always maintained on these interactive applications, I don’t think they drive significant incremental revenue. It’s another form of convenience for the customer. What we’ve seen -- the reason we decided to go forward is that we’ve seen both the cost of deployment technology drop dramatically in the last year as well as obviously a pretty rapid expansion in the number of EBIF-enabled homes. So we just felt that the equation, not unlike the second channel discussion we had a minute ago, we thought the equation was good in that the cost to do it had fallen quite a bit and the availability had increased. So we’re excited about it. We hope it might drive some incremental revenue. It may create some cost avoidance if it avoids a phone call to our live operators. But I think what it mainly is is a way to continue to get consumers -- to continue to make the service available when it and how consumers want it and try to be flexible in terms of providing a variety of devices and platforms from which the consumer can experience the show. So I think all this just continues to make us more relevant in the marketplace.

If I could add to Mike’s point, I mean, we’re seeing an enormous growth in our interactive revenue called the Internet. And it’s the general purpose Internet with people using devices that has seen the growth. And Mike, you might comment in particular how, you know, in [inaudible], we’ve seen a relative decline in the buy button compared –

Yeah, we have. We’ve clearly seen as the Internet has taken off and mobile has taken off that in the U.K. at least our interactive, the use of the buy button has declined over time. We continue to try to innovate on the buy button to hold those sales, but we’re not losing those sales, they’re just, you know, they’re going to the Internet, and that’s a more -- in our view, at least for now, that’s more natural, you know, with our -- we’ve seen from a very low base, extraordinary growth in the adoption of our iPhone and other Smartphone apps. And we’re now seeing real sales from those apps. And quite frankly, if you’re sitting on the couch watching TV, it’s as quick to pull out your iPhone and in about two clicks have ordered the product than it is to try to learn how to use the remote control. So again, I don’t want to -- we hope we’ll find some exciting interactive applications through the remote. I don’t want to diminish that, or we wouldn’t be doing it. But it is part of this broad line of services and, you know, if you kind of go through our priorities, at the very top of our list would be Internet and mobile, and the interactive and second channels would be, you know, not slower, but nonetheless, something we want to experiment with.

Great. Chris?

In regard to the DVD, I mean, obviously the DVD business has been declining, but we do believe that those rates on successful series and miniseries are worth real revenue. And unlike the theatrical business, where there’s been a target ratio between box-office and DVD sales, the TV business has been a lot less of a formulated business. And with the research that we’ve been able to get the information that we’ve been able to get shows that box sets of successful series and Internet-type miniseries are holding up better than the theatrical marketplace is. And we’re going to get some first-hand experience in that because we’re going to steam the Spartacus CD first season in September. So this is a little bit of a new frontier for us, but we do look at these rights, as I said before, as opportunistic on a case-by-case and overall slate basis. And we still think that there’s value there with the right projects. Matthew Harrigan – Wunderlich Securities: Good. Thank you very much.

Great. Thanks.

Now we’ll hear from Tom Egan with Collins Stewart. Tom Egan – Collins Stewart: Super, thank you very much. First question is on Starz Media. I guess I was hoping you could provide some color on what may drive some of the revenue in the second half of this year. Was it mostly coming from film library? And then in terms of costs, with 2/3s of the overhead going over to relativity, what will make up the cost side of that, the second half? And then I have a followup. Thanks.

Revenue in Starz Media for the second half of the year will be driven mostly by the library and the current products that are out there on the Overture side, as well as three additional Overture titles which will be released, as I said before, through our new distribution service agreement with Relativity, which is using the former Overture team, so they’re very familiar with the films. With respect to the expenses going forward, as I said, we’re evaluating all the strategic options for the Starz Media businesses, and we’re committed to trying to get the best result for the Starz Media shareholders as we go forward. But, you know, as I mentioned, we’re looking at significantly less losses in the Starz Media category given the decision that we made on Overture.

Right. And so is Starz Media getting a distribution fee on the three films that are being released via Relativity?

No, actually we have a distribution service. The ownership structure of those remains intact. The only think that Relativity is doing is distributing those films for us so –

Okay.

Right. So it’s actually the reverse of that you said.

Right. Okay. And the in terms of the overhead, so now Starz Media only incurs 1/3 of the overhead, or 1/3 of the personnel that were transferred. Is that right?

Well actually, we’re continuing to resolve the staff issues for the rest of Overture’s business because now that we are not in the business of acquiring and distributing films, there’s a lot of clean up that needs to be done. But the need for that staff going forward is for a very limited time.

Right. Okay. And the on Starz Network, so clearly that margin was under a little bit of pressure in the first half because of higher programming and marketing costs. So what should we expect for the second half? Thanks.

Well first, we remain comfortable with the estimates we set forth in, I believe it was November at the time we launched the tracker. Our 2010 estimate remains intact. We are still saying 5 to 10% growth, but we haven’t changed that. You can back in to where we are.

Yep. Okay. Great. Thank you.

Our next question today comes from Douglas Anmuth with Barclays Capital. Douglas Anmuth – Barclays Capital : Thanks for taking my question. I wanted to ask you a couple of things around QVC. Mike, first can you provide some more detail in the drivers of the U.S. EBITDA margins and in particular, trying to figure how sustainable these are going forward excluding effects of the GE Credit deal. And then secondly, can you talk a little bit about the trajectory of sales during 2Q and perhaps so far into the third quarter and how you’re thinking about the back half? Thanks.

Sure, Doug. On EBITDA, as I mentioned, you know, we saw some enhancement in initial product margins as the mix of the business shifted away from some of the lower-margin categories. As you know, I’m always low to try to predict product margins because it just really depends on what the consumer is engaged with. And so if we see consumer electronics really explode in the back half of the year after a bit of a lull in Q2, and we are excited about some of the innovations that are starting to get to market. This was a very innovation-bare period. You know, that would make the product margin look one way, but it would also probably help our sales line, so we’d probably be looking at s somewhat lower rate but maybe more attractive sales. And if we’re in the heavy apparel cycle, we could get the invert. So I try to shy way from being real predictive around product margins. The other things that empowered the EBITDA were a nice gain in -- a nice reduction in the obsolescence rate. We’ll continue to manage inventories tightly. We probably saw a little bit bigger improvement in Q2 than we might see on an average basis. And then we’ve just had pretty good leverage of our fixed costs line. So a long way of saying, I don’t know if every quarter we can see the kind of improvement in EBITDA rate that we saw in Q2. That’s an unusually high rate of improvement. But probably the biggest unknown for us is, you know, what’s the product mix look like and how do you sort of trade off sales growth versus product margin rate. And then as you noted, we do have to kind of adjust EBITDA going forward for the…

Great. If I could just follow up real quickly on the GE situation. And obviously I understand the positive effects in terms of cash and everything going forward, but how should we think about this in terms of revenue? That part seems a little cloudier.

There’s no material impact, but Dan O’Connell, do you want to just comment on that? Dan O’Connell: Well, I think what we can expect going forward is hopefully as the economy recovers, a reduction of the bad debt rate, which is about 8% on that portfolio, and we did increase the APR on the card at the beginning of the year. And we’re seeing some revenue growth from that. So I don’t think we’ll see much acceleration in the growth. The portfolio itself has grown by about 20 million from end of the year. Average account balances are up slightly and I guess in the current economic environment we’re seeing a little bit more in revolving activity on the card. So it’s hard to predict how that will play out in the balance of the year, but I would say the portfolio is performing well right now and will continue to do so.

And I would add also that the income from the card is not captured as a component of revenue. It’s a reduction of SG&A expense. There shouldn’t be any impact to revenue on the top line. Dan O’Connell : If I could add one more thing on the operating margin, if you look historically over the last couple of years, Q2 has tended to be a seasonally high operating margin. I don’t know whether that’s product mix or what, but we tend to have the highest operating margins, or among the highest operating margins in Q2. So that’s when you look sequentially that that’s a great -- really the best test.

Okay, that’s great. Thank you.

And our final question today will come from Douglas Anmuth with Barclays Capital. I apologize. Our final question today comes from Jason Bazinet with Citi.

Thanks so much. How are you?

Good.

I have a question for Mr. George on QVC. Earlier this year at the analyst day you were kind enough to sort of share with us the trends in the bad debt expense and the write-off rates of the Q-card as well as Easy-Pay. I think in the release that you issued this morning, you said that the bad debt expense did pick up a bit. Is the same thing true for the Q-card and the Easy-Pay write-off rates?

Dan, why don’t you take that one? Dan O’Connell : Yeah, I mentioned a minute ago that the bad debt rate on the Q-card was about 8%, that’s up from about 7.4% last year. And I believe for the year-to-date period, up about 2.4 million in write-offs on the Q-card.

Okay. And can I ask a conceptual question? This is going to sound negative and it’s really not meant to be. When I sort of think about how well you guys performed in the downturn and how well you’re performing now relative to sort of the buy-side expectations. And I listened to the number of new customers that you’re getting, is it possible that you all have sort of found a new sweet spot, if you will, by being a bit more flexible in terms of credit you’re willing to extend to people, or you know, whatever other screens you use in terms of credit scores? In other words, in an environment where other retails are being more restrictive and scared, you sort of opened up the envelope a little bit. Is that a fair characterization, or would you say that’s a misguided notion?

Well, I would say on, you know, we extend credit in two ways. One is through our Q-card and we have not fundamentally changed or loosened up the screening; and if anything on the margin, it’s probably a little tighter as we went through the recession. We were already fairly tight, so we didn’t have to respond as aggressively as other people did. And the issuance of our Q-card has been about stable or even down slightly. So I would say that as a general statement, while people are revolving more, to Dan’s point, we’re not fundamentally increasing the usage of credit on the Q-card. The other vehicle we use is Easy-Pay, where we will offer two to six installments on higher price-point purchases. We have used that a little bit more during the recession, and I think that’s been an effective tool for us. Although having said all of that, at the conceptual level, do I think credit access is meaningful in the story about performance? Probably not. I wouldn’t put that, in my own judgement, as one of the top drivers of getting incremental market share. I really do think at the core of the market share is driven more by the fundamentals of I think a better level of product innovation, more entertaining programming and really this focus on the Internet. And when you look at that 21% growth in revenue from the Internet in the U.S., that’s really a huge number; meaningfully different from other people in this space. And I think that just is continuing to entice more people to both get incremental purchases from QVC customers but also entice more new customers to the platform.

Okay. Thank you very much.

Operator, with that let us end the questions and we’ve gone the hour. Thank you to all who are listening for your interest in Liberty again. And I will look forward to seeing you next quarter, hearing from you. Thank you.

And that does conclude today’s Liberty Media Corporation Quarterly Earnings Conference Call. We thank you so much for attending, and have a good day.