The deal announced last week whereby Tele-Communications Inc handing over about 300,000 of its subscribers in Oregon, Washington, Missouri, Alabama and California to Falcon Holding Group, in return for $600m in Falcon stock and cash (CI No 3,191), looks like the shape of things to come for TCI in the short term. The motivation for the deal was to reduce TCI’s debt – $14.4bn at the last count. The move is likely to be repeated by TCI a few more times, as it is looking to shed some 4m of its 14m subscribers, according to TCI president Leo Hindery. TCI is believed to have got a 40% stake in Falcon in exchange for the local cable systems. The subscribers are worth about $600m, and the stake about $400m, so Falcon is taking out a $200m bank loan that it will channel straight to TCI. Falcon becomes an affiliate of TCI, which reports say will enable it to get the same license-fee discounts from cable networks that TCI gets. Falcon’s chairman and CEO, Mike Nathanson will retain his 37% stake, but the other investors will see their 63% cut to 18%. TCI will retain its Systems in Portland, Oregon, and Seattle, Washington, as part of its strategy to concentrate on large urban centers.