Time Warner to spin off, not sell, its cable business

Although Time Warner is strongly considering a "separate" structure for its majority-owned cable business, the company will be not be selling off a cable spin-off, CEO Jeff Bewkes said today.

"Cable is a great business," said Bewkes, speaking today at the Bear Stearns media conference in Palm Beach, Florida. Later, during a Q&A session, he added, "We're not trying to get rid of or sell the cable business."

But Bewkes also told investors at the conference that, due to the nature of the cable industry, TW's cable business might perform better for shareholders if it were not "locked to the rest of the businesses," which includes AOL along with extensive properties in the film and online and print publishing industries.

"There may be advantages to having [the cable business] separate so it can leverage differently," according to Bewkes. "It's likely we'll be able to get it into a more flexible ownership position."

Last month, Bewkes indicated the current ownership structure of Time Warner Cable was less than optimal in his view, with only 16% public equity. A spinoff of that division -- which just acquired Adelphia in 2006, and is considered the US' second largest cable service provider -- would probably leave its name and much of its executive structure intact, though with a much larger equity stake and perhaps a partner with the parent company.

It's here where the name "John Malone" could enter the picture, being the current head of Liberty Media and the former chief of the nation's largest cable provider, TCI -- whose assets have since been wrapped up into Comcast. Liberty currently holds the largest single stake in DirecTV, and a chunk of Time Warner Cable could effectively reassemble Malone's media empire, as well as give him the broadband uplink capacity his DirecTV DSL service desperately needs.