Prince William County developer Cecil D. Hylton is planning to sell his Dale City cable television system to a Texas company at a reported sale price of about $13 million or approximately $1,000 per subscriber. The sale would be a dramatic example of the value of cable systems in the Washington suburbs.
Neither Hylton nor Prime Cable of Austin would reveal the terms of the pact, but sources close to both Hylton's Cable Television Inc. and the Texas firm placed the cost of Prime Cable's option to purchase the system at $1 million, and said the total sales price was expected to be about $13 million.
Such a price tag would bring a substantial windfall to Hylton, the sod salesman-turned-builder who already ranks among Prince William's richest and most powerful men. According to industry analysts, Hylton probably has invested $1.5 million in his system since 1965, when he built it to attract homebuyers to his planned community of Dale City.
Hylton and his family are the owners and sole stockholders of Cable Television, Inc., according to a source close to the company. Hylton, a publicity-shy man, could not be reached for comment.
The cable industry's current average sales price ranges between $800 and $1,000 per subscriber, according to officials at Paul Kagan & Associates, Inc., a California cable newsletter publisher.
Serving about 12,500 cable subscribers in Prince William's densely populated northeast corner along Interstate 95, the Hylton cable system is the county's largest. A Prime Cable subsidiary, which covers the Quantico Marine Base and the towns of Dumfries and Triangle south of Dale City is the county's second largest.
C. Ronald Dorchester, vice president of operations and development for Prime Cable, said his company is "very hopeful" of completing the acquisition this fall. Prime Cable serves approximately 130,000 cable subscribers nationally, including systems in Annapolis and Lexington Park, Md. It also has allied itself with Richmond-based Media General Inc. in neighboring Fairfax County, and is bidding to administer the cable system there if Media General wins the county's cable franchise.
Norris Sisson, president of the Hylton cable company, confirmed that the option agreement has been signed but declined to specify when the sale might be concluded.
According to cable experts, the Hylton system makes a particularly attractive investment for Prime Cable. "This is a gold mine," said Steve Effros, executive director of the Community Antenna Television Association, a national trade group. Among the reasons:
* Prince William is growing at a faster rate than any other county in the Washington area, and is expected to continue its lead into the next decade. During the past decade, the number of households in the county has grown by 84.3 percent. Dale City, Occoquan and Woodbridge, the system's primary service areas, are among the fastest-growing localities in the county, recording a 10-year growth rate of roughly 100 percent.
* The county's supervisors have refused to regulate cable TV. That means that a cable company operating there will be able to avoid local franchise taxes that can be as high as 5 percent of the cable system's gross revenues.
* Any cable operator that takes over the Hylton system will be able to realize additional revenues by making use of the system's unused channel capacity. Although the system has the capacity of carrying 36 channels, only 12 currently are in use. The remainder, say the experts, could be devoted to pay programming at added costs to the consumer. Presently, subscribers of Cable Television Inc. pay $5.50 monthly for basic service, and an additional $9.95 for a movie channel.