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Jam On, Paul Allen, Jam On

5/30/2008 8:00 PM Eastern

In many ways, it was nice to see Paul Allen enjoying himself at the recent annual cable industry convention, jamming with his band at a charity fundraiser for New Orleans and claiming a Vanguard Award for science and technology from the industry’s trade association.

While he’d jammed on stage at other cable gatherings before — and with his pals on the oversized yacht he’s parked on the Mississippi behind the convention center before — they’ve always been private gatherings and we media have been warned not to abuse his copyright by publishing any snaps we took. This was more public, and publishable.

Heck, if a DVD gets made, as has been mentioned, his band’s performance is even reviewable. (My memory is he and they played the heck out of “Purple Haze,” and seemed to enjoy the praise he received from celebrity judge Jeff “Skunk” Baxter, the well-known national security expert, afterward.)

Beyond sharing his music, it was encouraging to see him sharing his pride, if you will, in being in cable, a business that’s cost him so much money over the years.

Someone who had a profitable exchange with Allen from one of the smaller transactions the billionaire has made had in cable has pointed out that Allen’s former investment manager, Bill Savoy, presided over the single greatest loss of personal wealth in U.S. history. I haven’t independently verified that, but BusinessWeek said four years ago he’d lost $12 billion, one-third of his net worth, in the preceding five years, and that half that sum came from his investment in cable operator Charter Communications, which the article called a “sinkhole.”

This past April 6 was the 10th anniversary of Allen’s first announced cable deal, for Marcus Cable, which he later rolled into Charter. Today, Charter has more than 5.5 million subscribers and is the third-biggest cable operator. Its stock has flirted with being delisted and trades for about $1.50.

So, why is this man smiling? And jamming?

Maybe because he can still afford to. He slid to No. 11 on the Forbes 400 list last September, from No. 5 two years earlier, but his net worth was still pegged at $16.8 billion, up from $16 billion in the 2006 rankings.

Maybe he feels like his overall vision, at times derided for investments like Charter, has been vindicated. His investments in cable were part of a “Wired World” idea: connect a broadband pipe to the home, earn money from that and also from a variety of service applications that he also owned.

Some of those service firms have done badly, some have done better. One of them, Digeo, makes a cable set-top with a navigation scheme that uses lots of graphics and lets you scroll quickly through your various stored digital media. It announced a synergistic deal at the Cable Show to add some more Charter subscribers. But it’s struck out with other operators.

On the content side of things, TechTV, the cable channel he backed, sold out to Comcast and merged into G4. Allen sunk about $200 million into Oxygen Media and presumably cashed out OK when it sold to NBC for $925 million last fall.

Allen’s certainly made money for plenty of people in cable. His system buys were generous, sometimes including “puts” to sellers that amounted to personal guarantees backing Charter’s stock price even as it fell.

He bought out the struggling High Speed Access, a cable-modem service provider targeting small operators, and made that one of the few dot-com busts to leave the stage with money left over after paying the bills.

So he’s made enough friends in the cable business that he certainly should feel at home and able to cut loose at mass gatherings.

And Charter seems to be rebounding, joining its cable peers in reporting some strong operational gains in the first quarter.

Pali Capital’s Rich Greenfield speculated last week that Time Warner Cable might have designs on Charter, despite the Allen-controlled company’s $19 billion in debt. In March, Allen received “informal inquiries” about possible transactions involving the company, Charter disclosed.

So maybe he was enjoying a last hurrah as a cable mogul?

Either way, as I say, it was nice to see him out there boogieing, cable style.

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