AOL signs away $570m cable profits

Agrees to hand over 2.1m subscribers...

AOL is to surrender 2.1m cable subscribers to cable partner and publishing giant Advance/Newhouse in a deal that will see it lose $507m worth of profitable custom. However, the deal, which will leave AOL with 10.8m cable subscribers, will also see the company shed $800m of debt and appease its partner company. The departing customers generated $1.25bn of revenue and $507m of profit for AOL but the partnership with Advance/Newhouse, in place since 1995, was always open to restructuring by either side and last year the Newhouse family threatened to walk away altogether unless they were given more control. According to reports in the Financial Times AOL believes it has won a major victory in keeping the partnership together. As part of the deal AOL took Advance/Newhouse's stake in high-speed internet firm Road Runner.