The new owner of Viacom International said Wednesday that talks had been held with outside parties on selling a minority stake in Showtime/the Movie Channel, the major pay-television rival to Home Box Office.
Sumner M. Redstone, chairman of National Amusements, whose $3.4-billion buyout of Viacom was approved during a seven-minute shareholders meeting Wednesday, said “preliminary discussions” had been held with unspecified parties.
Further talks will not be held until at least next Tuesday, the day the Viacom takeover is completed, he told reporters after the meeting.
Redstone, a theater operator who was the victor in an extended takeover battle with Viacom’s management for control of the giant cable-television, broadcasting and television programming company, has disclosed that Tele-Communications Inc. was interested in Showtime/the Movie Channel.
Tele-Communications, an Englewood, Colo., cable-system operator, is one of the lead members of a cable group that is buying a 37% stake in Turner Broadcasting System, another big, but troubled, supplier of programming to cable television.
Cable-system executives have said they want to keep such services as Showtime/the Movie Channel strong to prevent industry leader HBO from becoming too powerful. Showtime/the Movie Channel presents a mix of recent movies, original productions and sporting events to cable-TV subscribers for a fee.
Showtime/the Movie Channel’s earnings dropped 66% last year and the number of subscribers was also down, Viacom has said.
Redstone denied any intention to sell any of Viacom’s main businesses in order to pay off the big debts incurred during his takeover and stressed that Viacom will only consider selling minority interests.
“There are a large number of ways to raise money for the company if we need to,” Redstone said, adding that he believed there was much stock market interest in the company.
Redstone gave no estimates of the value of Showtime/the Movie Channel but said: “We view our cable systems as worth almost as much as our entire bank debt.” He was referring to the $2.3-billion credit facility arranged for the acquisition.
Besides Showtime/the Movie Channel, the second-largest cable business in the country, Viacom also operates MTV, a rock-video cable service, and Nickelodeon.