THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: SATURDAY, June 4, 1994 TAG: 9406040242
SECTION: BUSINESS PAGE: C12 EDITION: FINAL
SOURCE: BY MARC RICE, ASSOCIATED PRESS
DATELINE: 940604 LENGTH: ATLANTA
Los Angeles-based Times Mirror Co. confirmed Friday it has a tentative agreement with Cox, the privately held owner of 17 daily newspapers including The Atlanta Journal-Constitution.
{REST} Cox issued a statement later Friday confirming ``serious discussions'' with Times Mirror about cable, but the company declined further comment.
Cox and Times Mirror, though known mainly for their newspapers, have sizeable cable TV operating businesses. USA Today reported Friday that the two companies plan to combine their cable operations into a publicly held company that would be run by Cox.
Times Mirror, though not specifying the type of deal it was discussing with Cox, said in a statement: ``We do have an agreement in principle with respect to the aggregate consideration of approximately $2.3 billion, and other significant terms, but a definitive agreement has not yet been executed or delivered.''
Cox in April saw a proposed cable partnership with Southwestern Bell Corp. fall apart because of fears that the federal government's new cable regulations would severely cut revenues. But Cox said it would continue to look for ways to expand its cable business.
John S. Reidy, a cable analyst with Smith Barney Shearson in New York, said the things that killed the Cox-Southwestern deal should not threaten this one.
``In the case of Southwestern, you had a phone company that didn't know what was going on in cable pulling out. Here you've got a smart cable company, in Cox, taking control of a successful cable operation, in Times Mirror,'' Reidy said.
``I don't have any doubt of this coming together,'' he said.
A combination of the Cox and Times Mirror cable businesses would have about 3 million customers and rank in size behind only Tele-Communications Inc. and Time Warner Inc.
Cox is the nation's sixth-biggest cable company with 1.8 million subscribers. Cox's Hampton Roads system, with 194,000 subscribers in Norfolk, Portsmouth, Chesapeake and Knotts Island, N.C., is the largest cable operation in southeastern Virginia.
Times Mirror is ranked 11th with 1.2 million cable subscribers.
Times Mirror noted in its statement that it has previously disclosed it has been examining its strategic alternatives involving its cable TV operations.
``Our process is coming to a conclusion,'' the statement said.
Analyst Reidy said a Cox-Times Mirror partnership would likely be welcomed by the Federal Communications Commission, whose recent moves to regulate cable have been attacked by the industry.
``The biggest winner may be FCC Chairman Reed Hundt, who now can say, `See, I didn't hurt the cable industry,''' Reidy said.
USA Today said Times Mirror recently came close to a deal with Continental Cablevision, the Boston-based cable system operator that currently ranks as the nation's third-largest.
by CNB