Sinclair Fight Cost Mediacom Subs


Mediacom Communications’ three-month stand-off with Sinclair Broadcast Group cost the cable operator about 7,000 basic customers, or one-half of the total basic-subscriber losses it incurred during the fourth quarter.

Sinclair and Mediacom concluded their often-heated retransmission-consent battle for several Sinclair stations in 12 states in Mediacom markets in early February. While terms were not disclosed, it was expected that Mediacom agreed to pay cash for the right to carry the Sinclair stations.

Mediacom chairman and CEO Rocco Commisso said he decided to end his battle with Sinclair after reading reports that the Federal Communications Commission would not give him relief.

“At the end of the day, we caved in to their demands,” he added on a conference call with analysts to discuss fourth-quarter results.

Mediacom said it lost 7,000 basic customers as a result of the Sinclair deal during the period. Because the dispute continued into January, The MSO added that losses from that spat should also affect first-quarter basic-subscriber numbers.

For the period, Mediacom reported an 11.7% increase in revenue to $313.1 million and cash flow rose 9.7% to $111 million, its best growth quarter since 2002.

While basic-customer losses were higher than the 6,000-subscriber decline in the third quarter, the cable operator added about 14,000 digital customers, 34,000 high-speed-Internet customers and 22,000 telephone customers.

Mediacom also said it recently launched an all-digital-video service in selected markets with about 100,000 subscribers, and it will expand that offering to an additional 200,000 customers by the end of 2007.

Executive vice president of operations John Pascarelli said on the call that plans are to eventually establish two regional networks allowing Mediacom to provide full digital programming to 85% of its customers through two superheadends.

Mediacom also issued guidance for the full year of 2007, with revenue growth expected to be 8%-9%, cash flow to rise 7%-8% and capital expenditures to total about $215 million.

Mediacom shares were down one cent each to $7.94 per share in afternoon trading Friday.