Advance/Newhouse Communications Inc. (Bright House Networks)

Earlier this year, when media giant Advance/Newhouse Communications Inc. christened the new headquarters of its cable television operation in Bradenton, Fla., the unmistakable theme was optimism. A black-tie gala celebration called “Night under the Stars” attracted 300 guests, including community and civic leaders, who ate gourmet food and watched classic films projected onto the walls of the new facility.

Bright House Networks, as the cable division of Advance/Newhouse was officially named about a year earlier, is looking to the future. That’s because behind it lies the unpleasant memory of a seven-year partnership with Time Warner Inc. that didn’t work out so well.

Back in 1995, Advance/Newhouse, a media conglomerate that includes newspapers, television production companies and several major magazines through publisher Conde Nast, entered into an agreement with Time Warner to combine the cable television operations of both companies.

At the time, Advance/Newhouse served 1.5 million customers, which were added to Time Warner’s 3 million. The union created the second-largest cable company at that time. The honeymoon ended when AOL came to town.

The disastrous merger between the new and old media giants left Advance/Newhouse stuck with a partnership that was quickly souring. As AOL Time Warner’s stock continued to plummet amid Justice Department and SEC investigations, the company decided it was time for a divorce.

In the end, Advance/Newhouse walked away with 2.1 million subscribers to call its own, as part of an agreement wherein Time Warner will still oversee some aspects of programming, marketing and engineering.

But Bright House Networks clearly intends to form a successful operation independent of the ill-fated Time Warner deal. In 2003, along with the renaming, the company launched an aggressive marketing campaign to build brand awareness. The company has invested in several of the newer technologies available to cable subscribers, including high-speed Internet, on-demand and high definition programming.

Bright House has maintained its subscriber base of more than 2 million customers, making it the ninth-largest pay television provider . Its markets are concentrated in six major markets—Central Florida, Tampa Bay, Alabama, Indiana, Michigan and Bakersfield, Calif.

Financials are not available because the company remains under the control of the privately-owned Advance/Newhouse. The company’s president, Steve Miron, is the son of Advance/Newhouse chairman and CEO Robert Miron. Robert’s mother was the sister of Advance/Newhouse founder Samuel I. Newhouse Sr. The parent is still controlled by S. I. Newhouse Jr.and his younger brother Donald. Forbes magazine has estimated the brothers’ fortune at more than $15 billion.

—Robert Morlino, Bob Williams

August 4, 2004

Sources: Company Web site, Hoover’s Online, The Bradenton Herald, Securities and Exchange Commission filings, Yahoo Finance Online, St. Petersburg Times, Fortune magazine.