Comcast Takes Control
That deal dissolves a 50/50 partnership for five cable systems in Illinois (Rockford/Dixon, Quincy/Macomb, Springfield, Peoria, and Champaign/Urbana) and three in Indiana (Bloomington, Anderson, and Lafayette/Kokomo). Insight previously managed those systems, which had 696,000 basic video subs as of Sept. 30, 2007.
Comcast said it paid $1.3 billion for its share of the partnership's debt.
The transaction leaves Insight with ownership of four systems in Kentucky (Louisville, Lexington, Bowling Green, and Covington) and three in Ohio (Evansville, Indiana, and Columbus).
The privately held MSO nearly sold its remaining systems last year, but, following a reported bidding process that included interest from Time Warner Cable Inc. (NYSE: TWC), decided not to pursue other "strategic alternatives." (See Is Insight on the Block? , Time Warner Seeking Insight , and Insight Still Weighing Options .)
Insight announced it was transferring ownership of some of its systems to Comcast in April, and the deal was supposed to have been finished by the end of 2007. Comcast inherited its stake in the partnership after buying AT&T Broadband in late 2002. (See Comcast, Insight Divvy Up Midwest.)
The Insight transaction may be the last we see from Comcast in a while. Last month, the FCC voted in favor of an ownership cap that prevents U.S. cable MSOs from owning 30 percent or more of the pay-TV universe.
While it's possible that a court could overturn that decision, Comcast is the only MSO remotely close to the 30 percent ownership threshold. Prior to the Insight deal, Comcast had about 27 percent of the U.S. pay-TV market (24.2 million video customers). The No. 2 U.S. MSO, Time Warner Cable, has about 13.5 million video customers. (See FCC Caps Cable and Cap Schlap .)
— Jeff Baumgartner, Site Editor, Cable Digital News