Adelphia Still Losing Basic Subscribers

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Adelphia Communications Corp. filed its monthly operating report Sept. 26, reporting a continued decline in basic subscribers but a healthy gain in high-speed Internet customers.

Basic subscribers as of Aug. 31 stood at 5.09 million, down about 11,000 from the 5.11 million in July. Digital customers also fell by about 1,500 in the period, to 2.04 million. High-speed data subscribers rose by 35,000 customers to 1.6 million.

The basic-subscriber losses were actually an improvement over the same period last year, when the Denver-based MSO lost about 31,000 basic customers.

Revenue for the month was flat at $344.7 million, compared to $344.5 million in July. Cash flow in August was down 7.9% to $94.7 million, compared to $102.8 million in the prior month.

In mid-April, Adelphia agreed to sell its assets to Time Warner Inc. and Comcast Corp. in a deal valued at $17.6 billion. While that transaction also includes penalties if Adelphia’s subscriber count dips below a certain level, sources familiar with the companies said that Adelphia is far from hitting that mark.

Since March 31, Adelphia has lost a total of 76,000 basic subscribers, according to its monthly operating reports.

According to the asset-purchase agreement between Adelphia, Time Warner and Comcast, filed June 25, Adelphia is subject to a penalty — i.e. a lower purchase price — if the subscriber base falls below a certain level. Based on the $3,800-per-subscriber purchase price, it would appear that Comcast and Time Warner would be able to save nearly $300 million on the acquisition.

But while there are provisions for adjusting the final purchase price upward or downward based on Adelphia’s final subscriber count, sources familiar with the matter said that the operator is far below final subscriber-loss projections.