N.Y. Times Co. to Sell Cable TV; Minority Share Is Key to Deal
The New York Times Co. has agreed to sell its cable television system for $420 million in cash to an investment group that will include at least 20% minority ownership, it was announced today.
J. Bruce Llewellyn, a Philadelphia soft-drink bottling executive who is one of the nation’s top black business executives, will head the minority investment partnership.
The other investors, which will evenly split the majority ownership of the company, are two cable TV companies based in the Philadelphia area, Comcast Corp. and Lenfest Communications Inc.
NYT Cable TV of Cherry Hill, N.J., which serves 162,000 subscribers in southern New Jersey, apparently will become the nation’s biggest cable television system with at least 20% minority ownership, parties to the deal said.
By selling to a group that includes minorities, the New York Times Co. will be able to defer taxes on its gain from the sale, which it expects to be $320 million before taxes, according to David Gorham, the company’s chief financial officer.
The tax-deferral provision was created by Congress in 1978 to encourage minority ownership of communications companies. The minority group has to be the managing partner in order for the deal to qualify.
The Federal Communications Commission must certify that the deal meets the intent of Congress. Gorham said the FCC has indicated that approval is likely.
NYT Cable TV serves 59 communities in southern New Jersey, all within about 35 miles of its Cherry Hill headquarters. Its number of subscribers is expected to increase to 170,000 by the time the deal is completed.
At a price of $420 million, the price per subscriber will be $2,470, slightly above the average for recent deals.
Llewellyn has not finished lining up the minority investors who will join his group and, until he does, the percentage of the company that his group controls will not be decided, according to Julian Brodsky, vice chairman of Comcast.