Executives at Time Warner concerned with how to spin out its Time Warner Cable division seem to believe that saddling a cash-generating business in an increasingly competitive market with a lot of debt is good. It’s good for Time Warner Cable shareholders (including Time Warner), who will get a $10.27 per share dividend, but it’s kind of like penalizing a wage-earning kid by charging him a giant fee before he leaves the nest. However, it should help the parent company placate shareholders and shore up reserves while it figures out what the heck it’s doing on the content side.
Well, hopefully Time Warner has the sense to save a couple cents. With all this money they can at least put away a sizable reserve for when the economy starts to rain on their parade!