Pomona’s Cable TV System in $22-Million Sale Package
The cable television system operated here by Tele-Communications Inc. is being sold to American Cablesystems of California Inc. as part of a three-system, $22-million package.
Tele-Communications Inc. (TCI), which holds a 15-year franchise to operate a cable system in Pomona, has 5,400 subscribers, according to Bram Goodwin, area manager for the company. The franchise covers most of the city, although a small area is served by Foothills Cablevision.
TCI had asked the Pomona City Council for permission to transfer the remaining seven years of its franchise to American Cablesystems.
Proposal Reviewed
Martin Meier, communications director for the city, said he had reviewed the proposal and was satisfied that the buyer is financially stable and has good references from the other cities it serves.
Acting on Meier’s recommendation, the council unanimously approved the request at a recent meeting. As part of the deal, American Cablesystems of California also is acquiring the TCI systems in Inglewood and Carson, the latter of which TCI owns in partnership with Camden Communications Inc. of New York. The two South Bay systems have more than 10,000 subscribers.
American Cablesystems of California is a wholly owned subsidiary of Beverly, Mass.-based American Cablesystems Corp., which serves 300,000 subscribers in California, New York, Illinois, Massachusetts and Florida. The company also is negotiating to buy cable television franchises in Covina and elsewhere in the Los Angeles area.
New Offering of Stock
George Douglas, senior vice president for marketing and programming, said U.S. Securities and Exchange Commission rules prohibit the parent company from commenting on the deal because it is in the process of a making new stock offering to the public. However, the stock prospectus for American Cablesystems said, “American expects to consummate acquisition of the TCI system during the summer of 1986 for approximately $22 million.”
Goodwin, TCI’s area manager in Pomona, said the sale suits the overall marketing strategies of both firms and is in keeping with an industrywide trend toward “clusters of systems.”
Denver-based TCI is the largest cable company in the nation, with 4 million subscribers to about 400 cable systems across the country, but has little presence in Southern California. The company has been concentrating its efforts in the Pittsburgh area and in the Pacific Northwest, Goodwin said.
“TCI only had three systems here,” Goodwin said. “We want to be in other parts of the country where we have more systems. American Cablesystems started a base out here so for them it’s a nice fit.”
No Rate Increase
The sale will not affect subscribers, Goodwin said, adding that no rate increase is planned. He said no changes are anticipated for the 25 employees at TCI’s Pomona operation.
According to the stock prospectus, American Cablesystems also is negotiating a $68.5-million deal to buy systems owned by financially troubled CommuniCom Inc., which holds the franchise in Covina. That arrangement, however, is more tentative because CommuniCom is undergoing reorganization under Chapter 11 of the U.S. Bankruptcy Code and the terms of the sale must be approved by the Bankruptcy Court, Douglas said.
Culver City-based CommuniCom also has franchises in Bellflower, Corona, Culver City, Maywood, Tustin and the Hollywood-Wilshire area of Los Angeles.
On April 1, American Cablesystems purchased the 11,000-subscriber Jack Barry Cable TV system for $11.5 million. Jack Barry has cable franchises in Baldwin Hills, Playa del Rey, Ladera Heights, Lennox, Westchester and Windsor Hills. The Barry systems are near TCI’s Inglewood and Carson operations.
