Vogel: Charter Needs Allen’s Help on Adelphia9/29/2004 9:48 AM Eastern
Charter Communications Inc. CEO Carl Vogel told investors Tuesday that the MSO would be involved in the ongoing auction for Adelphia Communications Corp., but any deal would need some help from Charter’s chairman, billionaire Paul Allen.
At the Merrill Lynch Media & Entertainment conference Tuesday night, Vogel said Charter would “take a look at Adelphia assets, but it’s fair to say that anything that presents itself with Adelphia will require the participation and support of our principal shareholder [Allen]. We think that could be an excellent way to reduce the overall leverage of the company.”
Allen, cofounder of Microsoft Corp., owns 57% of Charter’s outstanding stock and about 93% of its voting power.
Charter has previously talked about an Adelphia bid as a possible way to deleverage the company -- adding less-encumbered assets would add to cash flow and lower the MSO’s leverage ratio, currently at about 9.5 times cash flow.
Vogel said deleveraging Charter will remain a priority, adding that the company has completed its upgrade plan and that capital expenditures will be targeted toward revenue-producing products.
He touted Charter’s voice-over-Internet-protocol telephony product, which had about 31,000 subscribers at the end of the second quarter, and its HDTV offering (with 51,000 customers) as examples of the MSO’s commitment to launching new services.
That focus on higher-end, higher-paying customers will continue, despite losing about 66,000 basic-video subscribers in the second quarter. Vogel said about one-half of those losses were basic-only customers.
“We are not going to chase around the lower end of the economic subscriber curve,” he added.