The estate of the "father of cable," Bill Daniels, has had to go to court to
hold Adelphia Communications Corp.'s Rigas family to a deal to buy Daniels Cablevision
at a huge price of $6,700 per subscriber.
The Daniels estate filed suit in U.S. District Court in Denver March 30
seeking to enforce the deal, contending that the Rigases failed to follow
through on the agreement they signed last September.
When the deal was announced, Adelphia chairman John Rigas said a private
company owned by his family would be the buyer. But court papers show that
publicly traded Adelphia itself signed the deal, although it may have been assigned
to the family.
The papers disclose for the first time that the deal was even more of a
record-breaker than believed. The Rigases agreed to pay $456 million for
Daniels' two California cable systems serving 67,400 subscribers. That puts the
price at an enormous $6,700 per subscriber.
The price on the larger of the two properties, Daniels' Carlsbad system, alone went for $6,900 per subscriber, or $410 million. The suit doesn't
explain why the Rigases were reluctant to close, saying only that beginning in
March, Adelphia executives simply refused to discuss the deal or respond to
Daniels lawyers' requests for information. Daniels estate representative Buzz
Mitchell went to court, but filed to dismiss it four days later without
explanation. Mitchell's attorney, Terrence Gill, wouldn't comment on the suit.
Mitchell and Adelphia executives could not be reached for comment.
Bill Daniels died a year ago after a lengthy, storied career as a cable
operator and system broker. A confidant of the industry's top players, he and his
investment-banking firm, Daniels & Associates, stood on one side of
virtually every major deal in cable for years.
This is the second high-priced deal that has brought the Rigases to court. In
January, Adelphia sued GS Communications over a similarly pricey deal, the $740
million purchase of 126,000 subscribers in Maryland, Virginia, West Virginia and
Pennsylvania. That deal was priced at $5,873 per subscriber.
The previous record was the $5,400-per-subscriber valuation Media General Cable got
in its $1.4 billion sale to Cox Communications Inc.