This is a partial transcript from Your World with Neil Cavuto, August 3, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: It didn't end with John Rigas and his sons' arrest. The cable industry itself under fire and cable stocks under pressure still. But with some stocks down 40, 50, even 90 percent over the past year, is this a case of a cable overkill?

Joining me now to discuss the industry, some of its giants including Leo Hindery, the chairman and the CEO of the YES Network; Michael Willner, the vice chairman and the CEO of Insight Communications, it's the nation's 9th largest cable operator and he's the chairman of the National Cable and Telecommunications Association -- all that on one business card; and Bill Gloede is here as well, the editor of Cable World magazine. Welcome to all of you.

Leo, help me first off with just the latest developments of the cable industry. We have Cablevision saying the Rainbow has kind of folded back, it's going to have to shake things up. Charter and Paul Allen saying, you know, we have got losses, we've got problems, we are going to try to move forward. One after the other, these stocks are getting hit, and you have got to wonder where is the bottom?

LEO HINDERY, CEO, YES NETWORK: You know, I think the bottom has actually come and somewhat gone. I think this has been a bit of an overreaction. The sector, Neil, has been under a great deal of scrutiny, but all industrial sectors have since the first part of the year. Those sectors that are more capital intensive historically, as this one is, those that have revenue growth as one of their key metrics and unit growth as one of their key metrics have all been held to scrutiny.

The cable industry remains a wonderful industry. But like any industry in this time of sort of heightened scrutiny, it would probably be served by helping the analysts community, by helping the shareholder community, understand its story a little bit better than it perhaps has in the past.

CAVUTO: But the only story they know, Leo, no offense -- I think just talking to the general public, they see those Rigas arrest a couple of weeks back, you know, and they see those guys being hauled off in handcuffs and they say, well, where there is smoke, there is fire. This whole industry is complex. It's dealings are kind of, you know, Byzantine, so a pox on all your houses. Is that fair?

MICHAEL WILLNER, CEO, INSIGHT COMMUNICATIONS: I think that's very unfair. I think that the industry has historically proven to be a very robust industry. I think that the accounting practices of the industry in general are perfectly fine. I think that the market looks at certain types of matrixes in order to understand the values of these cable companies.

CAVUTO: Then what happens, Michael? Just rifle through some of the charts of some of the premiere players, yourself included. Down, down, down. Jolt, jolt, jolt. Now, you are doing OK, but the fact of the matter, Wall Street thinks you are not going to.

WILLNER: If this is OK on Wall Street, this is a pretty painful OK. But, look, I think that cable stocks right now are selling, are trading at historical lows, maybe they're hysterical lows. If you look back in the last downturn, about 1996, the multiples were just about the same as they are today. But, at that time, in 1996, the industry had a $70 billion rebuild in front of it. It had to launch new services that were not proven. It had to look forward to new competition that did not really exist or take hold yet, either by satellite or by telephone companies and they were selling at these multiples.

Today, 60 billion of the 70 has been spent. The new services are proven. They are robust. They scale well. And we look forward to being able to bundle a full array of services.

CAVUTO: So, you think that the industry is still sound?

WILLNER: I think the industry is more sound than it's ever been fundamentally.

CAVUTO: OK. Now, Bill, help me with this. Now, Cablevision, of course, has had its own host of problems in its dealing with the Rainbow Media Group, -- created just 18 months ago, kind of bringing it back into the fold. But there is a company, I was looking through the stats the other day, it has lost 10,000 more subscribers than the second quarter, 17,000 combined. That's $873,000 you are losing, you know, in income every single month.

BILL GLOEDE, EDITOR, CABLE WORLD MAGAZINE: It's a small down payment to make on the Yankees.


CAVUTO: That's the problem, right? It's the whole Yankee phenomenon, right? Where does that stand, by the way?


CAVUTO: Bottom line, the poorer they get, the less likely they can pay you.

HINDERY: That is a tragedy.

You know, I think that the point that Mike is making is really the apt one. There are a lot of similarities today in '96. And I do think the industry is far advanced from where it was in '96. What happened in '97 and '98 that I think needs to happen today is the industry was very articulate about its pathway to the future. And I think it needs to revisit that. I think that the analogy to Adelphia is a poor one, as Mike said. I think a pox on their house. Insight is a brilliantly run company. Charter is. The Comcast folks who are stepping into the AT&T shoes have distinguished themselves.

CAVUTO: I do not doubt that. But all of a sudden, you have fire sale prices. When you unload a lot of those systems to cable operators now, let's say the old Adelphia households, isn't the fear is that it gets to be a fire sale and it depresses everyone?

WILLNER: These are the great market opportunities. As you look back in history, there are...

CAVUTO: Are you buying any of them?

WILLNER: Well, I am pretty invested in the industry right now.

CAVUTO: Yes, absolutely. So, you would not expand beyond that?

WILLNER: Well, personally, if the right deal comes along, we are always willing to listen.

CAVUTO: Are you afraid though, and as the industry expert here, Bill, you look at this all of the time, is there a fear that Adelphia's cold is the rest of the industry's sniffles?

GLOEDE: We have seen no evidence that what went on with Adelphia is in any other cable operation of size and scale in the country.

CAVUTO: We hear from investors who we cannot get our handle around cable and how they do their thing.

GLOEDE: Well, I think part of it is that, you know, cable is suffering from the post-Internet hangover. I mean, you know, the broadband, broadband, broadband, everything was going to be the Internet. And the Internet is exactly what you see it is today. It did not change the world.

CAVUTO: But then they were going to take on the regional Bell operating companies.

GLOEDE: And they will. They will.

CAVUTO: Do you think that's still going to happen, Leo?

HINDERY: You know, I do not think so. I don't think the competition against the R-Box is going to be as robust as one suggested.

CAVUTO: So, where is the future of cable?

HINDERY: The future is its core, which was always video, Neil. It is a wonderful video company. It's a wonderful video industry. It also will be just as robust on the data side. The phone side is still remains problematic from both directions.

I think that the issue here is that investors are never wrong. When you say that they cannot get their hands around it, it is not their problem then. It become the industry's problem.

And the point I keep suggesting to the industry is then, if investors are confused, then unconfuse them. This is a wonderful industry who will accomplish and has accomplished great things.

CAVUTO: Step back, one thing interesting, maybe you could comment a little bit on this, Michael. The Cablevision, if it unloads some of the popular channels it owns, you know, Bravo, American Movie Classics, who buys them?

WILLNER: Well, I mean, I think there are a host of content companies that would be very interested in buying I think very valuable assets.

CAVUTO: At depressed prices?

WILLNER: Well, I do not know what the prices would be. And I am not on the programming side of the business at all. So I am purely a cable operator with no differing agendas within ours.

CAVUTO: But, would you think that is the next step here, if they unloaded?

WILLNER: I think that they have some very unique assets that I think they could probably create with some competition over.

CAVUTO: Real quick.

GLOEDE: Neil, the whole media business is depressed.

CAVUTO: Tell me about it.

GLOEDE: You know, it is not just cable, you know. So programmers buying programming operations, I mean, who has got money out there. That is the question.

CAVUTO: Really?

WILLNER: One of the great opportunities for the industry is, and I differ a little bit from Leo, I think that our core business is the video business. But for us to not exploit the platform that we've invested in order to deliver a full array of telecommunications services is a mistake.

CAVUTO: Michael, final word on the subject. I want to thank you. Leo, good seeing you again. Bill, thank you very much. Some perspective on an industry we just want to help you with.

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