Skip to main content

Malone Taps Kern as TCI Vice Chairman

Englewood, Colo. -- Jerome H. Kern, whose dealmaking skills
made him a top adviser to Tele-Communications Inc. chairman and CEO John Malone, has been
named vice chairman of the MSO.

TCI's longtime outside principal counsel and a board
member since 1994, Kern, 61, was named to the newly created post following the
company's annual meeting here last week.

The short meeting had one highlight: Members of the
Rainbow/PUSH Coalition, a group headed by the Rev. Jesse Jackson, accused the MSO of
"redlining" communities when it comes to upgrading its cable systems -- a charge
that TCI denied.

Kern's official duties will include overseeing and
coordinating all matters that come before TCI's board of directors.

After operating out of a seventh-floor office at TCI's
headquarters here in recent years, Kern is giving up a full-time law practice with Baker
& Botts LLP. in New York to offer "strategic nonlegal" advice to his largest

MSO officials, however, were quick to warn against reading
too much into the appointment, calling it Malone's way of recognizing Kern's
years of service.

"With all of the activity that we have going on --
with the deals approaching completion -- this is John's way of acknowledging what
Jerry's been doing all along," TCI spokeswoman LaRae Marsik said.

Among the transactions that Kern has been involved with was
Time Warner Inc.'s acquisition of Turner Broadcasting System Inc., which transformed
TCI into Time Warner's largest shareholder.

Marsik said the appointment does not alter TCI president
and chief operating officer Leo J. Hindery Jr.'s position, and Hindery continues to
report directly to Malone.

Meanwhile, sources familiar with the company said
Kern's presence at TCI headquarters provides continuity during times when Malone is

"He's been with them for a long time," said
a veteran TCI-watcher. "And with Leo up to his ears in alligators, they probably
figured that they needed somebody there in Malone's absences."

The industry observer also said that Kern could be
instrumental in efforts to incorporate TCI's ownership of the Salt Lake City
into media coverage that can be offered over its TCI@Home high-speed
Internet-access service.

Others speculated that given Kern's involvement in
most of TCI's major deals over the last two decades, the appointment may signal
another blockbuster transaction in the works.

"I don't see it as anything other than bringing
somebody in who walks in those circles and who can complete those kind of deals,"
said another industry follower.

On the redlining charge, Rainbow/PUSH said low-income areas
served by TCI-affiliated systems in Jefferson County and Louisville, Ky., were scheduled
to be the last to receive fiber optic upgrades, while affluent communities across the
county, where household incomes exceed the statewide average, were placed at the top of
the list.

"We're very concerned about that because this is
1998, not 1968, and the minority communities across this country have commercial
alternatives to cable," said Thomas Hart Jr., a Washington, D.C.-based attorney
representing Rainbow/PUSH.

Hart warned that TCI faces increasing criticism if the
practice continues.

"We don't want that to happen. We're
shareholders, and we want to share in the benefits that you have to offer, and we
don't want to be in the position of publicly criticizing TCI," he said.

The organization also called on TCI to add blacks and
Hispanics to its board of directors.

Malone cited the company's record on diversity,
including a longtime investment in Black Entertainment Television and its plans to launch
12 channels of Spanish-language programming.

Hindery, who met with Jackson earlier in the week, said the
Louisville City Council had determined that TCI was not guilty of redlining.