& cplSiteName &

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
The big question is how President-elect Trump will react to the attempt by AT&T and Time Warner to circumvent FCC review of their proposed deal.
While 2016 has been a mild year for cord-cutting, the phenomenon could take off next year with the launch of new OTT video services from Hulu, YouTube, Facebook and others.
Thanks to its recent takeovers of Time Warner Cable and Bright House, Charter is nipping at Comcast's heels for the cable lead in the business services market.
Light Reading and SCTE/ISBE are tackling virtualization technologies together in both a Sept. 21 webinar and a Sept. 27 breakfast forum.
Light Reading and SCTE/ISBE are teaming up again to create multimedia content aimed at helping cable operators cut energy use and costs.
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
Heavy Reading: The Web-Scale View

1|18|17   |     |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's former chief analyst Patrick Donegan shared insight from the recent web-scale operators report, which featured research on how web-scale operators view the market, the best web-scale companies to ...
LRTV Custom TV
Cisco's Cloud Scale Networking: Automation, Virtualization & Simplification

1|18|17   |     |   (0) comments


Cisco's Sanjeev Mervana outlines the latest innovations in networking technology at CES 2017 in Las Vegas.
LRTV Custom TV
ADVA Talks Innovation & the Future of Networking

1|17|17   |     |   (0) comments


Ray Le Maistre and Christoph Glingener, CTO of ADVA Optical Networking, discuss the current state of the industry, cooperation and collaboration, open innovation and the future of networking.
LRTV Custom TV
Cisco's Infinite Video Platform

1|17|17   |     |   (0) comments


Cisco's Infinite Video Platform allows service providers to deliver broadcast-quality video over IP networks. Infinite video supports many devices, from 4K TVs to tablets to game consoles. Join Cisco's Rajeev Raman for a brief tour and live demo.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators. "If you think about where we're going… whether it's a mobile application, or a video ...
LRTV Custom TV
VMware Telco NFV Solutions – Preparing for 5G & IOT

1|9|17   |     |   (0) comments


Shekar Ayyar, EVP & Corporate Strategy/General Manager of Telco for VMware, discusses VMware's Telco NFV solutions role and foundation for the Imminent Arrival of 5G & IOT.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
A Women in Comms Glossary
Sarah Thomas, Director, Women in Comms, 1/18/2017
Is Cable One Beefing Up for Slaughter?
Alan Breznick, Cable/Video Practice Leader, Light Reading, 1/20/2017
Nokia CTO: 2017 Is the Year 5G Gets in the Field
Dan Jones, Mobile Editor, 1/19/2017
TV's Paradox: No HDR Without 4K
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Cable Has One Thing Verizon Needs
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.