New division focuses on non-b'cast interests
NEW YORK — Tele-Communications Inc. plans to create a separate business arm to hold its non-cable and non-programming interests, such as its big telephone investments, Internet interests and its overseas business investments, TCI execs said Wednesday.
And as quietly announced Tuesday (Daily Variety, April 30), the new business arm will be reflected in a new class of stock to be offered to TCI shareholders, but only for those willing to swap their existing TCI stock for the new class of stock. At a press conference Wednesday, TCI’s senior VP for finance, Barney Schotters, likened the new stock to a “technology-driven investment pool.”
TCI president Leo Hindery told the press briefing, following the company’s annual investor conference in Denver, that the new business division would be the third leg of the TCI group, in addition to the core cable business and the Liberty Media programming business.
Hindery and TCI chairman John Malone both presented an upbeat message to the briefing, which summarized what investors had been told during the daylong conference. “The core cable businesses are now restored to vitality and have clear operating plans in place,” Malone said.
Hindery, who was appointed president of TCI in February and has since shaken up the management and reorganized the structure, said the cabler was “committed” to improving its performance. In the first quarter of 1997 it increased cash flow 24%, which Hindery said took TCI to the “middle level” of the cable industry.
“I believe (TCI) can perform better than that,” he said.
TCI is promising to roll out digital video services to all its cable systems by the end of the year. While the cabler is about three years late in offering digital service, Hindery said this time “we intend to meet those promises.”
And taking up a subject opened by Malone last year, Hindery said TCI had failed to communicate clearly that the company was being forced to raise rates this summer mainly because of programming increases that were beyond TCI’s control.
Programming costs account for about one-third of TCI’s overall costs, Hindery said. And “about 85% of my programming costs are derived from seven organizations, and so we have been very aggressive in sitting down with all seven of them” to bring programming cost increases under control. He added that the consumer price index should be the measure for programming increases.
Hindery disclosed little about various business deals under way. He confirmed that TCI was discussing the sale of its interest in Intl. Family Entertainment, held through Liberty Media, to News Corp. but said nothing more. He said there were no talks under way about selling Liberty’s interest in its sports cable joint venture to News.