Century-TCI deal could spur cable TV news channel.

The banding together of Century Communications Inc. and Tele-Communications Inc., announced last week, gives Century the market clout it needs to launch its long-talked-about 24-hour cable news channel in Los Angeles.

"People in L.A. need to know what's going on," said Bill Rosendahl, senior vice president of Century's local cable division. "The local newscasts spend too much time on crime, the 'If it bleeds, it leads' approach. And everything is in sound bites. We believe people want more than that."

The deal gives Century majority control over TCI's current L.A.-area subscribers, essentially doubling Century's subscriber base here. With a larger subscriber base, Century stands to gain additional ad revenues necessary to underwrite the cost of operating a 24-hour news channel.

Cable Providers

The biggest cable providers in the L.A. TV market, which encompasses
Los Angeles and Orange counties.

                                                          Number of
Company                                                  Subscribers

Media One                                                  511,000
Century Communications                                     500,000
Time Warner                                                455,000
TCI                                                        335,000
Cox Communications                                         280,000

Rosendahl said the Century news channel could be launched in early 1999. Most of 1998, he said, will be spent getting regulatory approvals for the deal with TCI and integrating TCI customers into Century's system.

TCI currently has 245,000 customers in Southern California - in the eastern San Fernando Valley, Arcadia, Redlands, Ventura and Hemet. Century has about 500,000 subscribers in Sherman Oaks, Santa Monica, Beverly Hills, Los Angeles, Glendora, Hermosa Beach, Redondo Beach, Anaheim, Brea and Chino.

The deal actually has two components - a partnership and a customer swap. Century gets a 75 percent stake in the new partnership and TCI a 25 percent stake. The new entity will have about 745,000 subscribers, making it the largest cable operator in Southern California.

(MediaOne is currently the largest, with 511,000 Southern California subscribers.)

Under the swap portion of the deal, Century is getting about 90,000 TCI subscribers in the eastern San Fernando Valley. In exchange, TCI is getting about 90,000 Century subscribers in the Bay Area.

Taken as a whole, the deal between New Canaan, Conn.-based Century and Englewood, Colo.-based TCI represents what many industry observers are predicting will be a consolidation of the long-fragmented Los Angeles cable market.

"In this phase, Century is doing the consolidating in Los Angeles, while TCI further consolidates its holdings in the Bay Area," said Marc Nathanson, chairman and chief executive of Falcon TV, a Los Angeles-based cable operator.

By cutting this deal with Century, TCI gives up control of its L.A. subscriber base - for now.

"We see this as the first step in the consolidation of the highly balkanized Los Angeles market," said Andrew Johnson, western region spokesman for TCI. "In San Francisco, we now serve 1.4 million customers. Two years ago, those 1.4 million customers were served by 11 cable companies. We see that happening in Los Angeles. We started the process with this deal, but we expect others to take the next steps."

Johnson would not rule out the possibility that TCI would ultimately be among those making acquisitions in the predicted L.A. cable industry consolidation.

In this initial deal, though, it is Century that is left in control. And Century's Rosendahl hinted that his employer may not be done with increasing its L.A.-area clout.

"We're not finished with acquisitions yet," Rosendahl said.

Besides putting Century's plans for a 24-hour cable news channel on a faster track, Century's broader reach in the L.A. market will enable it to offer additional services, Rosendahl said.

So far, Century has lagged behind other cable providers in the region in offering such high-tech services as cable modems, digital television and broadband.

MediaOne, a subsidiary of U.S. West Media Group, is among those at the forefront. In October, it introduced its broadband, or cable Internet connector, service. Last year, Cox Communications unveiled broadband and digital cable service for its Orange County subscribers.

Now Century is looking to launch similar advanced services.

"This will give us the economies of scale and the population base to give our customers access to a broader array of channels, high-speed modems, digital television and possibly the potential of getting into the phone business," Rosendahl said.

RELATED ARTICLE: ESPN to Go Head to Head With Fox

Burbank-based Walt Disney Co. has announced that it will launch the much-anticipated ESPN West cable sports network in October 1998, setting the stage for a battle between Disney and the rival Fox Sports cable networks for the attention of die-hard sports fans.

The new regional network, the first created by ESPN, will carry the games of the Disney-owned Anaheim Mighty Ducks hockey team and Anaheim Angels baseball team. These teams are currently carried by Fox Sports West and Fox Sports West 2, owned by Twentieth Century Fox Film Corp.

Disney and Fox squared off in a bitter legal battle earlier this year when Fox banished the Ducks to the anemic Fox Sports West 2. Disney, which claimed the exile hurt ticket sales and merchandising, filed four lawsuits trying to yank the Ducks off the struggling cable outlet.

After the dust settled, the two companies resolved their differences, with the Ducks moving to ESPN at the start of the 1998-99 season.

Fox is owned by Rupert Murdoch's New York-based News Corp., which is buying the Los Angeles Dodgers. Fox has the rights to telecast UCLA and USC games in addition to Lakers and Clippers basketball games.

- Frank Swertlow