The Cable King

A TV merger for Westinghouse

Cable television, the transmission of TV signals by wire instead of through the air, may still be in its infancy, but it is growing fast. Some 17 million subscribers, who are concentrated primarily in big cities, now use the system. That is an increase of 12.7 million since 1970. Moreover, experts predict that cable TV, which will enable the viewer to receive up to 150 channels of programming, will some day be part of the home entertainment center for families across the U.S. Cable firms are thus jockeying into position in expectation of the fierce battle that will determine which company will dominate the field. Westinghouse, the second largest U.S. electrical-equipment maker and a top non-network broadcaster, took a giant step in that direction last week by announcing its intention to acquire Teleprompter Corp., the U.S.'s leading operator of cable TV, for $646 million. In addition to its cable franchises, Teleprompter also owns 50% of Showtime, a pay-TV entertainment network, and Muzak.

Several of the larger cable TV companies have already teamed up with major corporations in order to get the huge capital outlays necessary to bring in new subscribers and to develop programming for television. Time Inc., the second largest cable TV operator, acquired American Television and Communications Corp. in 1978; and American Express Co. last year bought a 50% interest in Warner Communications' cable TV division, which is the fifth largest cable TV company. Explains Teleprompter Chairman Jack Kent Cooke: "Cable TV is into the big money era. Without a very rich grandfather, you can't keep up."

The purchase of Teleprompter is a welcome new opening for Westinghouse. The cash-rich company has not made a major corporate acquisition in more than ten years, and Westinghouse will have the advantage of moving into a field that it already knows. The company now owns five VHF television channels, one UHF station, seven AM radio stations and four FM radio outlets. It also syndicates to other TV stations such programs as the John Davidson Show and PM Magazine. The firm, however, has almost reached the maximum number of television and radio stations that the Federal Communications Commission will permit any company to own. Westinghouse thus had to find a new field for expansion in broadcasting. At least for now, the Teleprompter merger will make Westinghouse the king of the cable TV mountain.