Charter/Comcast Tap Willner for Spinoff
Industry veteran Michael Willner is ready to be a big-time cable CEO once again.
Charter Communications Inc. and Comcast Corp. (Nasdaq: CMCSA, CMCSK) have announced that the former co-founder and CEO of Insight Communications has agreed to serve as president and CEO of "SpinCo," the cable spinoff that Comcast plans to create after it completes its proposed acquisition of Time Warner Cable Inc. (NYSE: TWC). Under the plan, SpinCo would inherit approximately 2.5 million customers from current Comcast and TWC markets across Alabama, Indiana, Kentucky, Michigan, Minnesota, Tennessee, and Wisconsin.
Willner left Insight in 2012 after selling the company to Time Warner Cable. He is currently president and CEO of Penthera Partners Inc. , the private software company focused on cloud and mobile technologies. Penthera powers some of the components in Comcast's cloud DVR service, including the cache-and-carry feature that allows users to download select shows from a home DVR to their mobile devices. (See TW Cable Buys Insight for $3B and Comcast Cloud DVR Storms Down East Coast.)
Even though Comcast and Time Warner have not yet received approval for their merger proposal, the two companies, along with Charter, have developed an intricate plan for reshaping the US cable landscape in the wake of the deal. Comcast plans to divest 3.9 million customers and reorganize its system footprint in a combination spinoff and exchange of subscribers with Charter.
As part of the complex agreement between Comcast and Charter:
- Comcast would transfer to Charter approximately 1.4 million existing subscribers in the Time Warner Cable footprint.
- Comcast and Charter would exchange approximately 1.6 million subscribers each in an effort to improve geographic efficiencies.
- Comcast would spin off an additional 2.5 million subscribers into SpinCo, which would be approximately 67% owned by Comcast/Time Warner Cable shareholders, and approximately 33% owned by the new, larger Charter entity. Comcast would have no role in managing the new spinoff company.
Comcast and Charter say that SpinCo will have a board of directors that includes three members appointed by Charter, including current president and CEO Tom Rutledge, who will act as non-executive chairman. Comcast will appoint three more members of the board and select the final three from a Charter-provided list.
Willner's long background in the cable industry makes him a reasonably safe bet to lead SpinCo. In addition to running Insight Communications, he was also COO of Vision Cable Communications and served twice as chairman of the National Cable & Telecommunications Association (NCTA) . As the head of Insight, he oversaw many of the Midwestern cable systems that SpinCo would inherit.
Willner has expressed concern in the past that the cable industry isn't keeping up with market changes and the rise of over-the-top video services. "The fear I have always had is that we get a little complacent about being the incumbent," he said last year at The Independent Show. "Incumbency can be your worst enemy and best friend at the same time." (See Cable Model Needs Urgent Fix.)
— Mari Silbey, special to Light Reading