Scripps agrees to buy cable systems of Mid-Tennessee CATV
Tue, August 26, 1997 by Rich Boehne
CINCINNATI, Ohio — The E.W. Scripps Company has signed a letter of intent to purchase several cable systems in the Knoxville/Chattanooga region from Mid-Tennessee CATV, L.P. for $62.5 million.The systems have nearly 34,000 subscribers and are adjacent to franchise areas already served by Scripps. When the purchase is completed, Scripps will have more than 264,000 subscribers in the east Tennessee market. Scripps has been evaluating strategic options for its cable operations, which ultimately could result in a sale of all or some of the Company’s systems, a restructuring of the assets, the creation of joint ventures, or the acquisition of additional systems. The ongoing evaluation process is unrelated to the purchase of Mid-Tennessee’s systems.“As the largest cable operator in eastern Tennessee, Scripps is the most logical buyer for these systems,” said Lawrence A. Leser, chairman and chief executive officer. “We couldn’t pass up this immediate opportunity to strengthen our Tennessee cluster at a reasonable cost.”The Scripps cable operations in Knoxville and Chattanooga are among the most advanced in the nation. The systems have been upgraded with fiber optic technology, at a cost of $60 million, and now are preparing to offer voice and data transmission services to businesses through a joint venture with Hyperion Telecommunications.Scripps’ media holdings in Knoxville also include the largest daily newspaper, The News-Sentinel; Cinetel Productions, a producer of programming for the cable television networks; and Home & Garden Television, a national cable network launched earlier this year. Scripps expects to apply a federal tax certificate to the Mid-Tennessee transaction, which effectively will reduce its acquisition cost. The one-time tax benefit was awarded to Scripps in 1993 when it sold a Memphis television station.Scripps has a total of 752,000 basic cable subscribers in 10 states. The Company also owns 18 daily newspapers and 9 network-affiliated television stations. Through its entertainment division Scripps operates: United Media, a worldwide syndicator and licensor of news features and comics; Scripps Howard Productions, a producer of television programming; Home & Garden Television, a 24-hour cable channel; and Cinetel Productions, a leading producer of programs for cable networks.