The Washington Post Co. announced yesterday that it has formally completed its $350 million acquisition of Capital Cities Communications Inc.'s 53 cable television systems.
The company also said that Howard E. Wall, who has been a Post Co. vice president and chief accounting officer for the past three years, will be president of the new cable division, to be named Post-Newsweek Cable Inc.
The acquisition, announced in August, is the largest in the company's history and turns the Post Co. -- which has newspaper, broadcast and magazine holdings -- into one of the nation's 20 largest cable system companies.
The Post was able to acquire the systems as a result of media cross-ownership regulations that required Capital Cities to divest itself of cable television systems when it acquired American Broadcasting Cos. Inc.
Those systems, which reach roughly 350,000 subscribers in 15 midwestern, western and southern states, had been a very profitable portion of Capital Cities' extensive media interests.
In a press briefing yesterday, Wall, who was executive vice president of Field Enterprises before coming to the Post, praised the Capital Cities cable management team, pointing out that the company enjoys significant cash-flow margins and penetration in its markets.
The cable systems have a 67 percent market penetration, "which is significantly above the national average of 56 percent," Wall said.
Wall said no major changes are planned in the new division, but that some "consolidation" of operations might occur. The company plans to spend more than $30 million to build up some of its older systems, he said.
In addition, Wall said Post-Newsweek Cable plans to explore increasing its basic cable rates throughout its systems when cable television deregulation legislation takes effect next year.
Wall said the Post Co. is committed to boosting the cash flow from its cable operation by 15 percent a year from its current annual flow of roughly $30 million.
The Post, which is financing its purchase through borrowing, has stated that it would dilute earnings by $1.45 a share this year.