Viacom Cuts The Cable
AFTER ONE FALSE START AND months of talks, Viacom said July 25 it would spin off its cable systems as well as $1.7 billion in debt. Giant Telecommunications Inc. will gain control of the systems--which have 1.4 million subscribers--by investing $350 million in the unit and taking over the debt. Viacom had tried to sell its systems to entrepreneur Frank Washington and TCI, a deal that was undone when Congress quashed the minority tax break it hinged on. The new deal, combined with Viacom's strong second-quarter profits, cheered investors. And better relations between Viacom and TCI might rekindle merger talks between Viacom's Showtime and TCI's Encore movie channels.