TCI gains Insight by going halves with Indiana outfit
The deal is one of more than a dozen similar partnerships either announced or planned by TCI, although it is at the smaller end of previous joint ventures. Eight previously announced deals have transferred a total of 3.1 million subscribers, whereas this deal transfers only 160,000 subscribers.
Previous deals have allowed TCI to shift a total of $4.2 billion in debt off its balance sheet. This deal will allow some debt transfer, but the amount is minimal, sources said. TCI did not disclose the precise amount.
Insight, which is transferring 160,000 subscribers from its systems into the partnership, will manage the combination.
In addition to the partnership, TCI will swap cable systems it now owns in parts of Indiana serving 62,500 customers for Insight's Utah cable systems. The exchange "will allow TCI to strengthen its operations in the greater Salt Lake City marketplace," TCI said.
TCI has more such deals to finalize. TCI president Leo Hindery told analysts recently that in addition to the eight deals already disclosed, four had been negotiated but not announced and six more were likely to be negotiated by the end of the year.
Hindery's objective is to pull TCI out of the East Coast and the South, sources say. Big deals still to be announced include a partnership with U.S. West Media Group and a deal with Comcast Corp.
The net result of the deals is to shrink TCI's subscriber count from 14 million to 10 million, putting it well below the top slot among cablers. In other measures, however, TCI is increasing its influence, according to Lehman Bros. analyst Larry Petrella, because TCI is getting equity in the partnerships or in other cablers as a result of the exchange of its systems.
TCI will have a significant influence over systems serving 35 million out of 100 million homes passed by cable, Petrella said.
