TELECOMMUNICATIONS : Falcon Cable, Belo Corp. in Joint Venture

Falcon Cable TV, the largest independent Los Angeles-based cable television operator, said it has formed a $58-million venture with Dallas-based A. H. Belo Corp. to help buy cable TV systems.

The venture is the latest in a number of partnerships and funds announced in recent months to buy cable TV systems. These buyers are finding more investors willing to commit funds for acquisitions of cable TV systems.

Such financing for acquisitions and expansion had been difficult to obtain in recent years because of new regulations restricting lending for highly leveraged transactions and uncertainty over cable TV re-regulation.

The Falcon-Belo venture has already agreed to buy five cable TV systems in suburban communities across the country totaling 70,000 subscribers, for about $135 million, Falcon Chairman Marc Nathanson said.

Belo will contribute $23 million of the initial $58-million partnership capitalization, and New York-based investment firm Butler Capital Corp. will contribute $17.5 million. Another $17.5 million will be raised from institutional investors.

Falcon--which will manage the systems and contribute a small amount of additional equity capital--is the nation’s 16th-largest cable operator, serving about 929,000 subscribers through seven investment partnerships.

Nathanson said the financing for the Belo joint venture is in addition to about $1 billion in credit lines extended to Falcon from a consortium of 24 banks.

“What people do not realize is that the size and type of capital coming into the cable industry from American blueblood investors is a very positive sign for the cable industry,” Nathanson said.