Cabler said to be selling Argentina, Chile assets

MEXICO CITY — Is TCI Intl. about to pack its Latin American bags and say, “Adios”?

That’s been the rumor in the Latino cable industry over the past week or so, following Argentine press reports that the U.S. cabler is negotiating to sell its 90% stake in CableVision, one of the country’s big three hardwire operators.

There’s also talk that TCI Intl. may quit neighboring Chile, where its subsid Bresnan Communications has a 30% stake in Metropolis-Intercom, one of two dominant MSOs.

Rumors not denied

Spokeswomen for both TCI Intl. and Bresnan would not deny the rumors, while two rival investors in Argentina both told Daily Variety that a TCI sellout “would not be a surprise.”

In Argentina, TCI Intl. is reportedly talking to Spanish telco TISA and local investor group Citicorp Equity Investments (CEI) about the sale of a 70% stake in CableVision, which had 580,000 subscribers as of March 31. At current market rates, such a stake could be worth north of $500 million.

In the first quarter, CableVision had an operating margin of just 5% (down from 12% a year earlier), and local sources say that recently the system has lost about 50,000 subscribers.

“I understand that TCI is not very happy with their investments, and that they’re not making money,” said Miguel Smirnoff, editor of Latino pay TV newsletter Private Adviser.

Analysts perplexed

Analysts have not reached a consensus as to the rumors, or TCI’s possible motives for quitting Southern Cone hardwire operations.

“TCI wants to reduce its debt-to-cash flow ratio in the U.S., but they are already paying off debt, and to pay off additional debt would be welcome but not absolutely necessary,” said Phil Sirlin of Schroders in New York.

“It’s strange that TCI would sell, because Argentina is viewed as an international test market for cable-telephony, with deregulation coming soon,” said Daniel Tassan, research head at Barings in Buenos Aires.

But the July 7 announcement of David Evans as incoming prexy of TCI Intl. may provide a clue. Chief exec John Malone cited Evans’ experience in creating international programming platforms, suggesting a possible switch of emphasis at the company.

TCI Intl. already owns 35% in Argentine soccer rights monopoly Torneos y Competencias and jointly owns pan-Latino sports net Fox Sports with News Corp. TCI Intl. is also a 10% investor in 60-channel satcaster Sky Latin America.

As for TISA and CEI, there’s no doubt they are in expansion mode. The two companies already own minority stakes in Argentina’s top MSO, Clarin-controlled Multicanal, and reports say CEI has been talking to publishing group Atlantida — 42% owner of top broadcaster Telefe — about a $200 million buyout.

Calls to CEI topper Richard Handley and CableVision chief operating officer George Stewart were not returned.

Complicating the scenario is the fact that since late 1996, TCI-CableVision has been in merger talks with VCC, Argentina’s No. 2 MSO, which is 50% held by US West. TCI and US West, who are cable partners in the U.K., have spearheaded discussions.

Should the CableVision-VCC deal proceed, TISA and CEI could end up with a position in each of the big three MSOs — which in turn would give Argentina’s monopolies commission something tough to chew on.

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