BY JON LAFAYETTE Charter Communications co-founder and former CEO Jerry Kent denies reports that he has teamed up with an investment banker to buy the troubled MSO. “The reports that I’ve teamed up with Goldman Sachs to go after Charter are inaccurate,” Kent told Cable World late last week. Reports that Charter is for sale or is being sought as a purchase mystified observers who don’t think any sale would be possible until the federal grand jury investigation into subscriber counts is resolved. “Who in their right mind would buy Charter until the grand jury investigation is finalized, given the potential of contingent liabilities a purchaser would be absorbing? You’d have to be smoking crack,” says analyst Robert Routh of Natexis Bleichroeder. “The only way it makes any sense is if the people who are going to take it private are the bondholders.” Routh estimates the debt to be approximately $21 billion. UBS Warburg analyst Aryeh Bourkoff stresses that Charter’s first mission has to be to repair its operations and restructure its balance sheet. “I view a sale or equity investment without a restructuring as being highly unlikely,” says Bourkoff. The current reports may stem from discussions Charter has been holding as various restructuring options are considered. A Vulcan Ventures spokesman declined to comment on Allen’s behalf and referred questions about Charter to the company. Meanwhile, more top execs have left or are in the process of leaving Charter. The list includes John Petrie, SVP of engineering; his top deputy Larry Scheutz, VP of engineering; Rick Lang, VP of marketing; and Ron Johnson, VP, Gulf Coast region. Charter spokesman Dave Andersen admits the company is in the throes of reorganization that will result in further layoffs. He noted that Lang and Petrie are still at Charter, but declined to comment further on personnel changes. Andersen also said there are no plans to move any division or the headquarters from St. Louis to Denver, despite rumors to the contrary. Walt Disney Co.’s cable networks face the “greatest risk” if MSOs led by Comcast try to cut programming costs, according to a report issued Friday by Jessica Reif Cohen of Merrill Lynch. To save money, MSOs could pull some overpriced networks, or move them to digital tiers. “We note that Disney has historically had strained relationships with cable operators,” she said. The analyst predicts that in the future, affiliate fees could be tied to ratings performance. The stock market’s early-year rally dissipated Friday as the Dow Jones Industrial Average suffered its worst one-day loss since Oct. 16. Renewed fears over the prospect of a war with Iraq and weakness in the dollar conspired to send the Dow tumbling 238.46 points, or 2.9%, to 8131.01. The Standard & Poor’s 500-Stock Index lost 25.94, or 2.9%, to 861.40, and the Nasdaq lost 46.14, or 3.3%, to 1342.13. On Friday, cable and media stocks tumbled along with the broader market. Cox lost 5%, or $1.55, to close at $28.95; Comcast tumbled $1.14, or 4.4%, to $25.02; and AOL Time Warner fell 37 cents, or 2.6%, to close at $14.11.