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Allen subscribing to cable
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April 6, 1998: 3:22 p.m. ET
Microsoft co-founder agrees to invest $2.77B in privately-held Marcus Cable
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NEW YORK (CNNfn) - Microsoft Corp.'s legendary co-founder Paul Allen is getting cable in a big way.
The billionaire investor -- lately the technology world's answer to Warren Buffett -- will invest $2.77 billion into Marcus Cable Co. L.P., a privately held cable provider based in Dallas. The investment represents his largest to date outside of Microsoft.
"Over 20 years ago, even before I helped to co-found Microsoft, I saw a connected future...I called that future 'the wired world,'" Allen said at a well-attended news conference with Jeffrey Marcus, president and chief executive of Marcus Cable.
"By investing into Marcus Cable, I will finally have some wires for my wired world," Allen said, provoking laughter among the crowd.
The move is widely seen as a further sign of the so-called "convergence" between the cable and entertainment industries and the technology sector.
Microsoft itself, which Allen left after being diagnosed with Hodgkin's disease 15 years ago, has been on the hunt for cable properties, pouring $1 billion into Comcast Corp. last year.
Allen, who recently sold $1.1 billion of Microsoft shares, said he foresees a digital world in which cable will bring more than conventional programming into U.S. households.
"The cable infrastructure provides an outlet for providing multimedia directly into the home," Allen said.
According to the National Cable Television Association's 1997 year-end report, only about 10.3 million cable customers were capable of receiving digital cable television services as of Dec. 31.
However, industry officials have increasingly expressed support for the digital format, possibly accelerating its acceptance.
Marcus is the nation's largest privately held cable company and is the nation's ninth-largest cable company, with more than 1.1 million customers in 18 states.
Marcus's original partner, Goldman Sachs, stepped in at the beginning of the decade. By 1995, investment firms including Hicks Muse Tate & Furst and Weiss Peck & Greer were lining up to pour capital into the cable company.
Following the latest transaction, Allen will represent Marcus's sole partner.
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