This post is making an error, or at least a poor choice in terminology, when thinking profit only means GAAP accounting or taxable profit.
Malone cut costs by reducing tax liability, getting better prices on programming, and increasing the subscriber base (revenue). What's that word for revenue minus expenses again?
A more honest explanation: Accounting depreciation != the actual change in value of things, and the cash flow statement can let you know when GAAP accounting isn't giving an accurate picture of success.
And about Malone's insight on leverage: Leverage ups your return on investment (when things don't blow up). Paying interest doesn't help you hide money from the tax man any better than setting dollar bills on fire would, but leverage can make big things happen from small amounts of investment.
Malone cut costs by reducing tax liability, getting better prices on programming, and increasing the subscriber base (revenue). What's that word for revenue minus expenses again?
A more honest explanation: Accounting depreciation != the actual change in value of things, and the cash flow statement can let you know when GAAP accounting isn't giving an accurate picture of success.
And about Malone's insight on leverage: Leverage ups your return on investment (when things don't blow up). Paying interest doesn't help you hide money from the tax man any better than setting dollar bills on fire would, but leverage can make big things happen from small amounts of investment.