Viacom Will Sell Half of Showtime for $225 Million

Viacom Inc., the diversified entertainment group, said Tuesday that it would sell half of its Showtime cable networks operation for $225 million to Tele-Communications Inc., the nation’s largest operator of cable-television systems.

The deal helps give a boost to Showtime in its competition with industry leader Home Box Office. That will benefit Tele-Communications, which would suffer if HBO became a monopoly provider of pay movies on cable.

Viacom Chairman Sumner M. Redstone had said previously that the company, which also owns the MTV and VH-1 video music networks as well as wide holdings in syndication, was looking for a partner for the Showtime unit.

The division operates the Showtime and the Movie Channel pay-cable services. Viacom will continue to operate the services.

The movie services have always been the runners-up to Home Box Office and Cinemax, owned by Time Warner Inc.

“We are delighted to have TCI as our partner in Showtime Networks Inc. I’m confident that with the support of TCI, Showtime will become a very productive and profitable business for years to come,” Viacom President Frank Biondi said in a statement.

Redstone owns 83% of Viacom’s stock after selling the rest in a public share offering.

The company’s valuable properties include the syndication rights to “The Cosby Show,” which has been sold to independent stations for over $600 million. It also operates the Nickelodeon cable service for children.

Tele-Communications, based in Denver, is the nation’s biggest owner of cable systems with 7.5 million subscribers, which gives it an estimated 16.6% of the market.