For Patriot Cable, A Premium Price
Patriot Media & Communications, the cable television service for Princeton Borough and Township, plus 14 other central New Jersey communities, has been sold to Comcast Corp. for $483 million in cash or just under $6,000 per customer, described as the highest in the industry since the telecom bubble of the late 1990s.
Comcast, based in Philadelphia, has 175 workers at its New Jersey headquarters at Windsor Corporate Park, off Route 571. Patriot has 225 employees in Somerset, but its owner, Steven J. Simmons, lives in Greenwich, Connecticut.
Simmons made his money with a cable television firm in the early ‘90s and has also written books for children. In 2003 Simmons and Spectrum Equity Investors bought the cable television business from RCN. Bidding against AT&T Broadband and Cablevision, the investors paid $245 million or $3,100 per subscriber (U.S. 1, March 19, 2003). The investors then spent about $44 million on much needed infrastructure upgrades for their 80,000 subscribers.
Today Patriot has 81,000 cable television subscribers, and the total number of potential subscribers within its 31 municipalities is 118,000. “These systems geographically complement our existing service areas in New Jersey,” says Fred DeAndrea, Comcast spokesperson, “and have been very well managed.” Comcast, in contrast, has 1.4 million cable television subscribers in New Jersey alone. The sale is expected to close by September.
Customers will hardly notice the change, says DeAndrea: “Comcast has a proven track record of smoothly integrating new systems following cable system acquisitions.” But Comcast has some shows, such as Lynn Doyle’s show on CN8, that will now be available to Patriot customers. Even before the deal goes through, Comcast’s advertising rates pop up on Patriot’s website, and Comcast Sports Net will be added to Patriot’s program list. In the next 30 days, Patriot customers will be able to see Philadelphia’s sports teams.
Patriot’s president, Jim Holanda, grew up near Cleveland, where his father was a NASA engineer and his mother an investigator for the Consumer Product Safety Commission. Holanda started his cable TV career right after graduating in 1987 from Ohio State University. “In 19 years I went from being a cable installer to president of a cable company,” he says. Along the way he ran the St. Louis office for Charter Communications.
Last June Verizon got the state’s OK to sell its own cable service over fiberoptic lines. Were Patriot’s investors spooked by the prospect of Verizon’s competition?
“Absolutely not,” says Holanda, citing how Patriot has been holding its own against DirectTV and satellite dishes. “We have the best product — best channel lineup, fastest internet speeds, best telephone service, plus Somerset County-based customer service.” And Patriot already had been competing, in a few communities, against Verizon’s bundled service product, FIOS. “We have increased revenues, earnings, and subscriber counts in those communities.” He also points out that the investors bought Patriot more than four years ago, and that they sold because it was a good time to cash out.
Comcast (CMCSA), 50 Millstone Road, Windsor Corporate Park, Building 300, Suite 200, Cranbury 08512; 732-935-5410; fax, 732-935-5572. Greg Arnold, regional senior vice president. www.comcast.com.
Patriot Media and Communications, 100 Randolph Road, Somerset 08873; 732-652-2400; fax, 732-652-2802. Jim Holanda, president. www.patmedia.net