Parsons Targets Comcast Partnerships

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Time Warner Inc. chairman Richard Parsons said the media giant could reach a conclusion soon regarding unwinding its 50-50 cable partnerships in Kansas City, Mo., and Houston with Comcast Corp., telling analysts Wednesday morning that a deal could come as early as next quarter.

"We’re constantly in conversations with Comcast about ultimately unwinding our combination of partnerships and participation that they have in our cable company," Parsons said on a conference call with analysts discussing the company’s third-quarter results.

"The first order of priority is how to rationalize our joint ventures in Kansas City and southwest Texas," he added. "I expect that reasonably soon -- let’s call that the next quarter or maximum two [quarters], you will have something to say on the cable partnerships."

Parsons added that dealing with Comcast’s 21% interest in Time Warner Cable would be addressed after the partnerships are unwound.

Comcast inherited the Time Warner Cable partnerships after its November acquisition of AT&T Broadband. Comcast has said for months that it would like to unwind the partnerships, as well.

Kansas City Cable Partners has about 306,000 subscribers, and the Houston partnership, Texas Cable Partners, has about 1.2 million customers, according to Time Warner’s 10-K annual report. Whether Comcast would take cash or systems or a combination of both for its interests remains to be seen.

Overall third-quarter results were driven by growth in the cable and networks divisions, offset partially by subscriber losses at its America Online Inc. Internet unit.

Third-quarter revenue was up 3.7% to $10.33 billion, and operating income before depreciation and amortization, also known as cash flow, rose 9% to $2.3 billion.

Revenue at its Time Warner Cable division was up 10% and OIBDA increased 11%. Digital and high-speed-data customers rose by 131,000 and 190,000, respectively, in the quarter, slightly below expectations.

At the networks, revenue increased 10% to $2 billion and OIBDA rose 8.8% to $566 million.

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