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Television Digest with Consumer Electronics, Jan 5, 1998

TCI alone was involved in deals affecting more than 5.6 million subscribers, carrying out plan announced by new Pres. Leo Hindery (TVD June 30 p5). In most of deals, TCI contributed large number of subscribers, typically plus chunk of debt, to joint ventures with smaller MSOs. Latter MSOs are to manage systems, with TCI taking minority stake. Most of those deals were announced in 2nd half, but have yet to close. Among TCI's new partners are Bresnan/Bass, Falcon, Insight, InterMedia/Blackstone, Time Warner.

TCI also had 820,000-subscriber system swap deal with Cablevision Systems, sold systems with 22,000 subscribers in N.H. and Vt. to FrontierVision and bought out U S Cable's 50% ownership of cable systems with 160,000 subscribers in Chicago.

Time Warner was clear 2nd in deal-making arena, potentially moving into first place among cable MSOs, depending on how subscribers are counted. Biggest deal was 2.3-million subscriber plus $1.7-billion debt joint venture with TCI (TVD Sept 8 p1). It also did 640,000-subscriber joint venture with Advance/Newhouse, 250,000-subscriber system swap with Adelphia, 55,000-subscriber deal with Marcus.

Other big deal-makers in 2nd half included: (1) Cablevision Systems, which, in addition to 820,000-subscriber swap with TCI, sold systems with 265,000 subscribers in 10 states to MediaOne, 65,000 in Ill. to Insight, 53,000 in Me. to FrontierVision. (2) Jones sold systems with 25,000 in S.C. to Washington Post Co. and 18,000 in Cal. to Century. It also bought back systems with 112,800 subscribers from its managed partnerships. (3) Marcus sold systems with 26,500 subscribers in Del. and Md. to Comcast. (4) TCA and Washington Post Co. swapped systems with 33,000 subscribers in Tex. and Okla. (5) SBC Communications sold its systems with 270,000 subscribers in Washington suburbs to Prime Cable, essentially ending its role in cable business. (6) Sonic Communications sold systems with 117,000 subscribers in Cal. and Utah to Charter. (7) Cox sold systems with 85,000 in Ohio to FrontierVision.

Even those system sales weren't necessarily biggest deals of year. Biggest impact probably came from Microsoft's $1-billion investment in Comcast and rumored additional investments to come.

Cable program interests also accounted for some huge deals: (1) Seagram paid $1.7 billion for 50% interest in USA Networks. (2) Gaylord sold Nashville Network and Country Music TV to Westinghouse for $1.55 billion. (3) Cablevision Systems and Fox finalized deal to combine their regional sports networks, with Fox paying $850 million for 40% of Rainbow Sports. (4) ESPN agreed to buy Classic Sports Network for $175 million. (5) Comcast and Disney bought majority of E! Entertainment from Time Warner for more them $300 million. (6) Cablevision Systems bought ITT's majority of Madison Sq. Garden and its programming interests for $670 million.

Deals were much smaller in first half of year, led by TCI's 464,000-subscriber Buffalo-area partnership with Adelphia. TCI also had 103,000-subscriber system swap with CableOne and 52,000-subscriber swap with Jones. Cox swapped systems with 97,000 subscribers with U S West and 90,000 with Time Warner. Time Warner also did swap with Marcus involving 125,000 subscribers.