Time Warner Takes 100K Subs Off Block

Author:
Publish date:

Time Warner Cable — the MSO arm of AOL Time Warner Inc. — has decided not to sell about 100,000 subscribers in several smaller markets that it started shopping around in September.

MSO spokesman Michael Luftman confirmed the systems are no longer for sale. "We decided for business reasons to keep those systems," he said.

He declined to give further details.

Time Warner put the properties on the block last September in an effort to jettison some of its smaller clusters. The MSO has about 12.8 million subscribers nationwide; about 90 percent of those customers are located within clusters of 100,000 subscribers or more.

Waller Capital Corp. represented Time Warner. Waller also declined comment.

The systems are primarily located in the Southeast, around the Florida panhandle, and in Kansas and Missouri.

While those systems did not meet Time Warner's definition of clustering, the company hoped they would for smaller operators.

The systems themselves are in relatively small markets. More than 80 percent are in two clusters — Independence, Emporia and Chanute, Kan., with about 40,000 subscribers; and DeFuniak Springs, Century and Plantation, Fla., with another 40,000 customers.

Emporia has about 9,000 subscribers; DeFuniak Springs serves roughly 11,000 homes. The smaller systems include Jasper, N.Y., with 57 customers and Troupsburg, N.Y., with 47 customers.

The systems' locations caused some observers to speculate that possible bidders could include Mediacom Communications Corp., which purchased about 800,000 subscribers in Iowa, Kansas and Missouri from AT&T Broadband last year. Mediacom declined to comment.

According to some observers, the properties didn't lack for bidders. They were simply priced too high.

When the systems came on the block last September, most observers expected them to be valued at between $2,000 and $3,000 per subscriber, which would have brought in between $200 million and $300 million.

AT&T STILL SELLING

With the Time Warner systems out of the mix, that leaves about 340,000 rural subscribers in Montana, Wyoming and Colorado that AT&T Broadband put on the market last year. Sources said Broadband should decide on the winning bidder for those systems soon. Bidders include Bresnan Communications Inc. —thought by many to be the front-runner —and Alaskan cable and telephone service provider General Communications Inc.

Adelphia Communications Corp. also said it would sell about 700,000 subscribers in non-strategic systems — an intention it first announced more than a year ago — but it hasn't yet reached a deal.

Many analysts expect the company to give an update on the fate of those systems at Adelphia's fourth-quarter conference call, slated for March 27.

Related