Swap Meet? Cable Ops Hungry for Scraps

With Time Warner and Comcast’s purchase of Adelphia official now, what are the chances other operators, such as Charter and Cox, are going to be able to pick up a few systems? To hear the winning bidders talk, pickings are slim; but industry observers are more optimistic. Time Warner’s Dick Parsons told reporters Thurs that there "really aren’t any excess systems," a sentiment that was echoed by Comcast’s Steve Burke, who said the number of systems divested would not be nearly as many as the 317K basic subs Comcast sold to Bresnan from the AT&T deal. Top of Comcast and Time Warner’s priority list: close the deal (it’s expected to take about 9 months). After that, they will look at swapping and system sales. Best bets include Cox and Charter’s L.A. systems (TW’s acquisition of Adelphia and Comcast’s L.A. systems make it the largest MSO in the DMA). Another possibility: Cox’s Orange County system for Time Warner’s San Diego one. "We believe that this transaction could spark further swapping in the cable industry," a Merrill Lynch research note said. "This could lead to operational improvements across the industry and improve cable’s competitive positioning relative to both DTH and phone company competitors." Smaller ops also are licking their chops, hoping to pick up the odd system that doesn’t fit into Comcast or Time Warner clusters. "If there were an opportunity, and we anticipate that there will be, we’d be interested," a Cequel III spokesman said. "There are a lot of ifs… we’ll just have to wait and see."