You will be redirected back to your article in seconds

Viacom Cable Systems Sold To TCI Affil

After months of haggling, Viacom Inc. announced Jan. 20 the $2.3 billion sale of its cable systems to Tele-Communications Inc. affiliate Intermedia Partners.

The big surprise in the late-hour announcement was that it did not include settlement of Viacom’s antitrust lawsuit against TCI – despite the cable giant’s demand throughout the negotiations that the lawsuit be dropped before the cable deal was done.

TCI chairman John Malone vowed as recently as 10 days ago that he would not do the deal without settling its differences with Viacom.

“It’s a little like Stalin selling guns to Hitler,” Malone remarked.

Viacom and TCI are at odds over several issues, including carriage of Viacom’s basic cable networks MTV, VH1 and Nickelodeon and the possible merger of Viacom’s premium service with Showtime and TCI’s Encore.

Viacom had insisted that TCI agree to carry Viacom’s MTV and Showtime cable channels before the lawsuit was dropped.

A spokesman for Viacom said Viacom and TCI had agreed on the conditions that would allow the lawsuit to be dropped, mainly that the carriage agreements be signed. He added that the two sides had agreement on the carriage “pending action on this” but declined to elaborate.

It is understood, however, that the carriage agreement will be implemented, and the lawsuit dropped, once the cable sale closes. The sale is subject to a tax certificate from the FCC, however, an issue that has brought it into the spotlight from Washington.

Viacom said the sale was expected to close in the second half of the year. But making the lawsuit settlement conditional on closure means that any problems with the deal would re-open the lawsuit.

The spokesman denied that congressional scrutiny of the tax issues had any impact on timing of the announcement. “We announced things when they’re done.”

In a statement Jan. 20, Viacom chairman Sumner Redstone said “Viacom is a software-driven company and this agreement dramatically demonstrates our commitment to reinvesting in our core businesses. This transaction also is a significant step, both in realizing our strategic focus and in dramatically improving our capital structure for both the short- and long-term.”

Viacom will use the $2.3 billion proceeds from the sale to reduce its debt, putting its balance sheet in a much healthier position. Viacom’s stock price hit its highest point in the past 12 months based on the expectation of the cable sale.

The sale will also be important in Viacom’s plan to lift its credit rating nearer investment grade, which is important if the company is to reduce its borrowing costs.

Viacom’s systems, in Seattle, northern California, Dayton, Ohio, and Nashville, have 1.1 million customers. The entities buying the systems are Mitgo Corp and affiliates of Intermedia Partners, which is in turn tied to TCI.

Popular on Variety

More Legit

  • David-Alan-Grier-Blair-Underwood

    David Alan Grier and Blair Underwood to Star in 'A Soldier's Play' on Broadway

    David Alan Grier and Blair Underwood will star in a Broadway production of Pulitzer-Prize winning drama “A Soldier’s Play.” The play, written by Charles Fuller, is set in 1944 and follows a murder mystery centered around the death of black Sergeant Vernon C. Waters (played by Grier) who is found on a Louisiana army base. [...]

  • The Inheritance review

    'The Inheritance' Announces Broadway Cast

    After an Olivier-winning run in London, “The Inheritance” is gearing up for its Broadway debut. The two-part epic has set the cast for its transfer from the West End to the Great White Way. John Benjamin Hickey, Paul Hilton, Samuel H. Levine, Andrew Burnap and Kyle Soller are among the cast members reprising their roles [...]

  • Patrick Page, Amber Grey, Eva Noblezada,

    'Hadestown' Announces 2020 National Tour

    ‘Hadestown’, the eight-time Tony award winning Broadway musical, is set for a national tour in 2020. The show will stop in more than 30 cities including Denver, Houston, Los Angeles, Minneapolis, New Orleans, and more. The musical is a stage adaptation of the Greek myths of Orpheus and Eurydice and King Hades and his wife [...]

  • Jake Gyllenhaal

    Listen: Why Jake Gyllenhaal Is His 'Best Self' in the Theater

    Looking for the best possible version of Jake Gyllenhaal? You’ll find it onstage, according to the actor himself. Listen to this week’s podcast below: “I am my best self when I’m working in the theater,” Gyllenhaal said on the latest episode Stagecraft, Variety’s theater podcast, on which he appeared with Carrie Cracknell, the director of [...]

  • Photo: Jeremy Daniel

    'The Lightning Thief: The Percy Jackson Musical' Gets Broadway Run

    “The Lightning Thief: The Percy Jackson Musical” is Broadway bound. The musical adaptation of the franchise about a teenager who discovers he’s the son of Poseidon hits the Great White Way on Sept. 20 ahead of an Oct. 16 opening night. It comes on the heels of an extensive, nationwide tour that took the show [...]

  • Tom Sturridge Jake Gyllenhaal

    Jake Gyllenhaal and Tom Sturridge Celebrate 'Sea Wall/A Life' With Star-Studded Opening Night

    A star-studded audience looked on as Jake Gyllenhaal and Tom Sturridge returned to the stage for their double monologue performance in “Sea Wall/A Life.” Theater-goers and celebs including Anne Hathaway, Tom Hiddleston and John Mulaney gathered in Manhattan’s Hudson Theatre for opening night, celebrating a show tackling grief, birth and death through the eyes of [...]

More From Our Brands

Access exclusive content