Cox Communications Among Bidders for Prime Cable's Las Vegas System

Strategic Insights -

Cox Communications Inc. is reportedly vying to acquire Prime Cable's Las Vegas system, a deal expected to fetch between $1.2 billion and $1.3 billion, making it the most expensive cable TV system sale in the U.S. The Las Vegas system, with nearly 300,000 subscribers, is a unique asset due to its size and growth rate of 5-6% annually, surpassing industry averages. Industry insiders and trade press reports suggest that Cox Communications is indeed a bidder, along with Comcast, Tele-Communications Inc., and Charter Communications.

Key Takeaways:

  • Cox Communications Inc. is reportedly among four bidders for Prime Cable's Las Vegas system, which is expected to fetch $1.2 billion to $1.3 billion.
  • The Las Vegas system has nearly 300,000 subscribers and is growing at a rate of 5-6% annually, making it an attractive asset in the cable industry.
  • Cox Communications has a history of pioneering clustering cable customers in large metro areas, with notable systems in Phoenix and San Diego.
  • Despite being a large company with 3.3 million subscribers, Cox Communications has slipped from fifth to sixth largest in the country.
  • The company's size is a significant factor in securing big investments, such as the PrimeStar cable-controlled satellite TV service.
  • BellSouth, another Atlanta-based player, has a right of first refusal on the purchase of the Las Vegas cable operation but has declined to comment on the sale.

Statistics:

  • The Las Vegas system has approximately 300,000 subscribers.
  • The system is growing at a rate of 5-6% annually.
  • Cox Communications has 3.3 million subscribers.
  • The company has a system in Phoenix with 512,965 customers and one in San Diego with 472,060 customers.
  • The production of PrimeStar, a cable-controlled satellite TV service, involves significant investment.

Sources:

  • Cox Communications Inc.
  • Prime Cable
  • Solomon Smith Barney (cable analyst Spencer Grimes)
  • The trade press (industry insiders)