AOL Time Warner merges with Advance/Newhouse

Posted: Thursday, June 27, 2002

NEW YORK (AP) -- Shortly before he took the helm at AOL Time Warner Inc. last month, incoming chief executive Dick Parsons promised to streamline the company's sprawlingly complex structure. The company just got a little bit simpler, but it also lost control of 16 percent of its cable subscribers.

AOL Time Warner will still be the second-largest cable TV operator in the country after it completes the restructuring of its cable partnership with Advance/ Newhouse Communications, which was announced Monday. AOL will wind up with 10.8 million subscribers, versus 22.3 million that the AT&T Comcast will have.

But the deal is a strategic blow to AOL Time Warner, which is seeing its base of cable TV subscribers shrink. Under the terms of the deal, the Newhouse family is taking direct control of 2.1 million cable subscribers contained in a partnership with AOL Time Warner.

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