Viacom discusses cable systems deal with TCI

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TELE-COMMUNICATIONS, the US cable TV company that has bid for control of Madison Square Garden in New York, is in talks with the arena's owners, Viacom, about another multi-billion-dollar deal in cable properties.

The deal would mean a cable consortium, including TCI, would buy Viacom's cable systems for between dollars 2bn and dollars 2.5bn, allowing Viacom to further reduce its heavy debt while settling a protracted lawsuit involving the two firms.

The lawsuit, charging TCI with monopolistic practices in the cable TV industry, dates from last winter's protracted takeover battle for Paramount Communications, which Viacom ultimately won. The companies have been in negotiations for the past month about a sweeping deal that would resolve their conflict, discussing first a joint venture and now an outright sale of Viacom's prized cable franchises.

A TCI spokesman said the acquisition of the properties in question - dense franchises that abut many TCI territories - would still leave TCI 'well south' of the 30 per cent of the US cable market that any one cable firm is allowed to own.

TCI also confirmed yesterday its Liberty Media subsidiary had submitted a bid on Monday for Madison Square Garden, its sports teams and cable TV channel, but said Viacom's bidding rules prevented it from disclosing the price. Cablevision - another cable group - and ITT are also believed to have bid for the arena.