Light Reading

Comcast, Charter Talking Turkey?

Alan Breznick
4/21/2014
50%
50%

Charter Communications may end up with a nice chunk of Time Warner Cable after all.

Charter Communications Inc. and Comcast Corp. (Nasdaq: CMCSA, CMCSK) are exploring the transfer of at least 3 million cable subscribers from Comcast to Charter if Comcast's pending $45.2 billion purchase of Time Warner Cable Inc. (NYSE: TWC) passes muster, according to several news reports over the holiday weekend. The subscriber selloff could be worth up to $20 billion, cutting the cost of the TWC deal for Comcast while enabling Charter to nearly double in size.

Sources told both the Financial Times and Reuters that the Comcast-Charter talks are serious but still in the early stages. And, not too surprisingly, none of the three MSOs involved are commenting on the news reports right now.

But a deal between Charter and Comcast would make sense for several reasons. First, it would give Charter more of the size and scale it has been feverishly seeking in one fell swoop. It would be very difficult for Charter, which now has 4.2 million basic cable customers, to add another 3 million or more subs through a series of smaller acquisitions. (See What's Next for Charter?)

Moreover, such a sizable deal with Comcast would likely give Charter one or more major metro clusters in the US, something which it dearly lacks now beyond its former St. Louis hometown base. Although it's not known which cable systems Comcast and Charter might be discussing, some possibilities include TWC's systems in Wisconsin, Texas, and the Carolinas, where Charter also has some concentration.

From Comcast's perspective, a deal with Charter could assuage regulatory concerns in Washington, DC and some state capitals about the huge cable monolith that a Comcast-TWC merger would create. While Comcast has pledged to sell cable systems with 3 million subscribers to cap the new company's size at about 30 million video customers, or no more than 30% of the US pay TV market, an actual agreement to do so would undoubtedly generate more trust in Comcast's intentions. (See Comcast-TWC Deal: Playing All the Numbers.)

In addition, a nice little deal on the side with Charter would remove Charter as a potential thorn in the side of the deal. While Comcast is offering far more money for TWC than Charter ever did and TW Cable's board has accepted Comcast's terms, Charter has not yet dropped its own hostile $37.3 billion takeover offer for TWC. So Charter could still make trouble for Comcast's grand plans if it were so inclined.

Besides, why raise the ire of John Malone, Charter's powerful backer, if it can be avoided? After all, what's a mere $20 billion between friends?

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/21/2014 | 7:08:13 PM
Brilliant!
Brilliant move by Comcast and TWC. It reduces regulator objections and turns an enemy of the deal into an ally. A strategy worthy of the Lannisters on Game of Thrones!
Phil_Britt
50%
50%
Phil_Britt,
User Rank: Light Sabre
4/21/2014 | 4:00:48 PM
Re: Just dandy
I agree that a deal like this could help ease things with regulators. However, expect more of the regulatory complaints to come from the likes of CBS and Disney, not from other cable companies. It's an issue of control of content AND distribution.

 

I also agree subscribers will wind up on the short end. Don't they always? The big guys keep getting bigger with more power. Howard Beale on Network had it right.
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
4/21/2014 | 2:20:28 PM
Just dandy
OK, Charter would win in such a deal, Comcast would be even a bigger win--I guess the only loser would be Comcast subs. I'm sure the regulatory folks will love such an arrangement.
More Blogs from Breznick Unbound
Comcast co-founder and longtime CEO Ralph Roberts leaves behind a lasting legacy of business success and integrity after passing away Thursday night at the age of 95.
Light Reading and SCTE are joining forces to create multimedia content about a number of key cable tech topics, starting with DOCSIS 3.1, WiFi and IP video.
In LR's inaugural BTE Video Summit, speakers will look at how the video industry is changing and how service providers can cope with those changes.
At the Gigabit Cities Live confab in Atlanta, speakers and participants float suggestions for the nation's first Gigabit State.
Despite the dire warnings of top telco and cable execs, Gigabit service rollouts and announcements have only sped up since the FCC passed its Title II rules less than three months ago.
Flash Poll
From The Founder
Anshul Sadana answers questions from Steve Saunders, Light Reading's founder and CEO, about Arista's CloudVision, a global cloud network controller for workload orchestration and workflow automation delivering a turnkey solution for cloud networking.
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Between the CEOs
Video Exclusive With Basil Alwan, Alcatel-Lucent

7|24|15   |   26:44   |   (5) comments


Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
LRTV Custom TV
VDF: Enable the Financial With Mobile Money

7|20|15   |   06:53   |   (0) comments


Ian Ravenscroft discusses how operators can expand to occupy the entire digital services value chain through service innovation.
LRTV Custom TV
Telefónica on OSS Transformation

7|20|15   |   06:01   |   (0) comments


Jose Gonzales discusses the details of Telefónica's operation transformation program.
LRTV Custom TV
Judi Achmadi on Huawei's Cloud Storage Solution

7|20|15   |   03:33   |   (0) comments


Judi discusses the key business goals of TelekomSigma's public cloud service and how Huawei's solution helps them address challenges.
LRTV Custom TV
KPN Enlightening Digital Business & IT Transformation

7|20|15   |   06:19   |   (0) comments


Rob de Beer discusses the changes that operators need to make with service innovation now coming from the Internet world.
LRTV Custom TV
Stratus Telco-Grade Cloud Solutions & NFV

7|20|15   |   07:34   |   (0) comments


Ali Kafel from Stratus Technologies addresses high-availability concerns within the telco industry with a solution that enables telcos to provide high-availability and stateful fault-tolerance using a software-based approach.
LRTV Documentaries
The Six Million Dollar Business Man

7|20|15   |   01:52   |   (0) comments


Steve Saunders, publisher. A man barely alive after an acquisition malfunction imploded the company he founded. Gentlemen, we can rebuild Light Reading. Better, faster, stronger.
Between the CEOs
CEO Chat With Anukool Lakhina, Guavus

7|20|15   |   38:51   |   (1) comment


Guavus CEO Anukool Lakhina talks to Light Reading founder and CEO Steve Saunders about the role of operational analytics in the communications services and networking sectors, particularly in relation to IoT.
LRTV Custom TV
IBM's Flash Storage With Intel QuickAssist

7|20|15   |   03:18   |   (0) comments


Intel's Bev Crair and IBM's Eric Herzog discuss how IBM's V9000 Flash Storage System has helped customers around the world. Featuring real-time compression powered by Intel QuickAssist Technology, the V9000 is a next-gen flash storage solution.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
To keep up with consumers' increasing digital lifestyles, an IT system and operating model overhaul is required using a modern BSS, IES and analytics.
Hot Topics
FCC Plan Could Stymie Rural Broadband
Carol Wilson, Editor-at-large, 8/3/2015
Eurobites: Nokia Seals HERE Sale
Paul Rainford, Assistant Editor, Europe, 8/3/2015
Verizon Small Cells Ready to Rock in Chicago
Sarah Thomas, Editorial Operations Director, 7/31/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
I was pleasantly surprised when Ericsson recently agreed to let me interview its CEO, Hans Vestberg. Traditionally, mega-companies like Ericsson (or Cisco) have kept ...
Basil Alwan, President of IP Routing & Transport at Alcatel-Lucent, discusses virtualization, cultural challenges, the capex crunch and more with Light Reading founder and CEO Steve Saunders.
Cats with Phones
Comes With Free Phone Stand Click Here
Who says cats don't have any skills?