Front Office Football Central - Time Warner, Comcast to buy Adelphia

http://www.usatoday.com/money/media/...adelphia_x.htm

Quote:

NEW YORK (AP) — Time Warner (TWX) and Comcast (CMCSA), the two largest cable TV companies in the country, announced Thursday that they had reached an agreement to buy the assets of the bankrupt cable company Adelphia Communications (ADELQ) in a deal valued at $17.6 billion in cash and stock. The deal beat out a last-minute bid by Cablevision Systems (CVC), a New York-area cable TV company, and still faces several steps before closing, including approval by regulators and bankruptcy court. Time Warner and Comcast will pay $12.7 billion in cash and 16% of the stock in Time Warner's cable subsidiary, Time Warner Cable, which will become a publicly traded company at the time the deal closes. A source close to the deal but speaking on condition of anonymity valued the stock part of the payment at $4.9 billion. Time Warner and Comcast will also swap cable customers. As part of the multipart deal, Comcast will give back its 21% interest in Time Warner Cable and pay about $1.5 billion in cash. It will wind up with an additional 1.8 million cable subscribers as a result of the deal. Time Warner will gain 3.5 million subscribers. After the deal closes, Comcast will maintain its lead as the largest cable TV company in the country, with 23.3 million customers, and Time Warner will remain No. 2 with 14.4 million subscribers. The deal expands the reach of both Time Warner and Comcast, and allows them to arrange their subscribers more efficiently in geographic "clusters," making it easier to save costs and make upgrades to cable systems. For Time Warner, floating shares in its cable company also allows investors to assign a separate value to the company's burgeoning cable business, which has been growing strongly because of new revenue from premium services like high-speed Internet, digital cable service and voice telephony. Having a separately traded stock in a cable company will also provide Time Warner with a "currency" with which to make future acquisitions in the cable business, something that Time Warner CEO Dick Parsons has said he wants to do. The companies said they expect the deal to close in nine to 12 months. Adelphia, which is based in Colorado, has been operating under bankruptcy protection since 2002 after collapsing in an accounting fraud and corporate looting scandal. Company founder John Rigas and his son Timothy were convicted of conspiracy, bank fraud and securities fraud.

MMmmm

This is a tasty deal especially to me because it gives us (Time Warner Cable) a majority of the Los Angeles and Orange County markets. Direct TV is already reeling with their current marketing in the LA/OC area that is claiming customer service will be lost and cable bilils will go up. But this is the same company that is claiming they have a larger market share then all cable companies combined in the U.S. (which is false). We've all been talking and hoping this deal would happen at work for the last 2 years since Adelphia announced their problems and now it going to happen.