Through The Wire: Your MSOs Bigger; My Teams Better

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Billionaire entrepreneur and cable mogul Paul Allen may nothave beaten Comcast Corp. to the purchase of MediaOne Group Inc., but there's atleast one arena where Allen has the upper hand on the MSO. Allen's surprisingPortland Trail Blazers team had the best record in the National Basketball Association atpress time, besting Comcast's equally surprising Philadelphia 76ers. Bothteams appear to be headed to the NBA playoffs, which could set up an unprecedented,all-cable championship series. Cablevision Systems Corp.'s New York Knicksaren't out of the running, but they are fading fast.

The Comcast-MediaOne bombshell has plenty of repercussionsin terms of programming, creating a number of potential winners and losers. In terms offledgling networks, the winners' list includes E!'s Style network, whichComcast owns a majority stake in and which the Philadelphia-based MSO aggressivelylaunched. Style has a shot at doubling its distribution now that it will have access toMediaOne's 5 million homes. And Knowledge TV and Great American Country, whichComcast will gain ownership in via its purchase of Jones, will probably also enjoy a boostin carriage with their new entree to MediaOne's homes. On the flip side, GerryLaybourne's Oxygen could end up a loser. While MediaOne management was hot on theplanned women's network, sources said, Comcast is not as big a cheerleader.Nonetheless, Comcast may decide to use its new leverage to demand a stake in Gerry'sand Oprah's creation. Other fallout from the deal: A number of programmers arereportedly unhappy that contracts for 10.6 million subscribers will be handled byComcast's Tom Hurley, who is known as an extra-tough negotiator.

Just when you might have thought that it was a fadingissue, along comes Mars Inc. with a TV spot "snickering" at cable customerservice. In a commercial for Snickers Miniatures candy that's been airing this month,viewers hear a voice-mail message indicating that a cable company's representativesare all busy. Yeah, they're busy all right -- busy playing in bumper cars andplaying games at an arcade. The unkindest cut: One contributor to The Wire spotted the adon a cable network.

Have you noticed that international cable stocks aregrowing more and more popular among Wall Street cable analysts lately? The undercoveredlikes of Canadian MSOs Rogers Communications and Le Groupe Vidéotron drew a favorablereport recently from Salomon Smith Barney, and Janco Partners keeps touting the UnitedKingdom's NTL Inc. and United International Holdings Inc., a Colorado-based MSO thatowns stakes in overseas MSOs. Another Wall Street scribe who's considering startingCanadian coverage points to the fact that outside catalysts, like investments from BillGates or Paul Allen, haven't hit international MSOs yet, and those stockshaven't had the huge run-up of U.S. cable stocks. But there's another, equallypractical reason: Big U.S. cable stocks are starting to disappear through consolidation,while "there's still the same number of analysts covering the sector," theanalyst noted.

Although C. Michael Armstrong wasn't expected to be onhand to model the latest in party hats, AT&T Corp. officials were expected toofficially welcome Tele-Communications Inc.'s corporate staff to the new family withan employee celebration last Thursday at TCI headquarters in Englewood, Colo. Among theparty favors expected to be doled out were -- surprise, surprise -- prepaid AT&Tlong-distance calling cards. TCI subscribers can also expect that little item, as canstockholders who'll be getting the newly issued annual report. Can it be that thefreewheeling TCI style is already letting some air out of AT&T's historicallystodgy, no-nonsense corporate culture? "Hey, they bought us: They're going tohave to make some changes," joked one TCI executive. "We're an excitingbunch."


By Kent Gibbons, from bureau reports.

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