Liberty Media is a behemoth. It's gone through so many incarnations that Wall Street has had difficulty figuring out just what it's worth. Even average people have difficulty understanding the empire that John Malone has put together. In an attempt to make the world a brighter place, I decided to break this monster into pieces that we all can understand, because it's a great holding company with wonderful assets and gobs of free cash flow.

Liberty Media is one company that is traded in the form of three tracking stocks: Liberty Capital (NYSE: LCAPA), Liberty Starz (NYSE: LSTZA), and Liberty Interactive (NYSE: LINTA). None of these tracking stocks are legal entities in themselves. All the assets are owned by Liberty Media Inc. The tracking stocks offer investors different ways of investing in different Liberty assets.

Let's begin with Liberty Starz; it's probably the easiest of the three tracking stocks to understand. It contains Starz Entertainment, with premium cable channels Starz, with 16.9 million subscribers, and Encore, with 30.6 million subscribers. It also has Liberty Sports Interactive, which centers around online fantasy sports, and a 3% ownership in ViaSat Inc., which provides satellite-based communications.

Liberty Interactive is chock-full of online businesses that Liberty scooped up because they were tops in their fields. (Liberty owns 100% of all of the following, except when noted). Outdoorsy types have no doubt heard of, while a lot of you heavy-lifters know If you've ever purchased a Halloween costume online, there's a good chance you got it from Do you own a timeshare? If so, you might be dealing with Interval Leisure Group (Nasdaq: IILG) (29%). You've probably seen or heard ads for, which is part of  I'm certain that you've heard of QVC, Home Shopping Network (33%), Expedia (Nasdaq: EXPE) (24%), and Ticketmaster (29%).

Finally, we have Liberty Capital, which is everything else under the Liberty moon. It has 22 businesses; 100% ownership holdings include the Atlanta Braves, Leisure Arts, Overture Film Studios, Starz Media (the production side of the network), and GPS provider TruePosition.

Now we know what the individual tracking stocks cover. In part 2 of this article, I delve into the financials of the company as a whole, and how to evaluate each of the tracking stocks on their own.

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