Ruling could pave way for sale to TW, Comcast
NEW YORK — Adelphia has fended off America.
Bankrupt cable company has won a ruling over startup cable net the America Channel, which had sued to prevent the sale of Adelphia assets to Time Warner Cable and Comcast.
U.S. Bankruptcy Court Judge Robert Gerber on Friday ruled in favor of Adelphia, which had filed to block the antitrust suit in the hope of clearing the way for the sale. Gerber blocked the suit from going forward.
The America Channel, a Florida-based net that’s not yet on the air, had argued the sale is unfair on competitive grounds and is part of a monopolistic plan on the part of the large cable operators to divvy up the country.
Company also said that the sale would make it difficult for indie nets like TAC to get on to systems.
The Adelphia sale, in which Comcast and Time Warner would buy Adelphia’s approximately 5.3 million customers, also would result in a complicated three-way trade between the companies that will switch the cable provider for an estimated one in 10 American cable subs. The sale must close by July 31 or risk being scotched altogether.
With execs at all three cable companies on tenterhooks, ruling spelled a big victory. It not only lifts an impediment to the sale but makes it unlikely other suits would be forthcoming before the July deadline.
And legal experts also say it bodes well for a hearing expected later in the month in which the court will rule on an Adelphia fast-track motion seeking to allow a sale to go through even without a reorganization plan in place for Adelphia (Daily Variety, May 31). The same judge who quickly tossed out the America suit also will decide the fate of Adelphia’s motion, and his ruling suggests he simply may want to get the sale over with.
Adelphia filed the fast-track motion a week ago after execs came to the conclusion that squabbling among creditors over a reorganization could hold up the sale. If allowed, the unusual move would bypass the whole creditor process and leave the creditors to fight only over the money instead of the company.
America Channel reps called the ruling on their suit “bizarre” and said they would appeal.
While Adelphia’s customer base is relatively small, its sale will have a domino effect on the country’s two largest cable companies.
Comcast is looking for a larger pool from which to draw bundled-service, or “triple-play,” customers, which has become critical to Wall Street. The sale would result in a net gain of about 2 million subs for the company.
Time Warner in particular has been waiting with bated breath; the delays in the sale are holding up its plans to spin off a piece of Time Warner Cable.
The sale also would add nearly 4 million subscribers to TWC, putting it, with about 15 million subs, ahead of DirecTV.