Cable Wi-Fi

Cablevision Chief Plays the Dating Game

CHICAGO -- INTX -- So what does Jimmy Dolan really want?

That was the question cable industry executives and observers were asking after Dolan, CEO of Cablevision Systems Corp. (NYSE: CVC), unexpectedly called for the consolidation of his company's hometown New York market. Speaking on a general session panel here, Dolan shocked the audience and the four other major MSO leaders on the panel by urging his colleagues to focus on merging markets rather than merging with each other.

"I'd like to see us move toward a consolidation of markets," said Dolan, whose company has largely split the huge New York market with neighbor Time Warner Cable Inc. (NYSE: TWC) for decades. "Consolidation of the New York marketplace would provide a great deal of ingenuity, access to resources and lower costs for consumers … If New York was operated like one market, you would see things like WiFi more effectively distributed throughout the marketplace … If it were operated as one operation, there would be a lot more we could do."

Asked if he was proposing some kind of deal with TWC, which analysts have endlessly speculated about over the years, the outspoken Dolan replied yes. But he then quickly added that he was also proposing a deal with Comcast Corp. (Nasdaq: CMCSA, CMCSK), which controls parts of the New Jersey suburbs in the greater New York market. "I think I'm proposing a commune," he cracked, to the audience's amusement.

Sitting on stage just a few feet to Dolan's left, Time Warner Cable Chairman & CEO Rob Marcus recovered from his shock with his own quip a few moments later. "I don't know if I just got asked out on a date or asked to get married," he said, drawing more laughs from the crowd.

Joining in the fun, Cox Communications Inc. President Pat Esser joked that he felt like he was on Match.com. "We're all trying to update our relationship status in front of 10,000 people," he quipped.

For more fixed broadband market coverage and insights, check out our dedicated broadband content channel here on Light Reading.

Industry analysts largely expressed doubts that TWC would try to buy out Cablevision because of the hefty price that would likely be required and the mature, intensely competitive market in which Cablevision plays. Nevertheless, Cablevision's stock price spiked after Dolan's remarks, rising more than 7% yesterday.

Dolan's move momentarily drew attention away from the ongoing cable soap opera about whether TWC and Charter Communications Inc. could settle their differences and walk down the aisle hand in hand. Asked about the prospects for such a deal, both Marcus and Charter President & CEO Tom Rutledge, sitting side by side, declined to offer any clues.

"The world is full of possibilities, but I can't tell you them," Rutledge said. Similarly, Marcus demurred, saying he wouldn't discuss M&A on the panel.

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

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KBode 5/8/2015 | 6:25:30 PM
Re: the jimmies Yeah I hear you. I think Cablevision has been a Time Warner Cable acquisition rumor for about as long as they've been a company. I assume there's a reason it never happens, and that reason is probably Dolan thinking his cable empire is worth much more than it actually is.
MordyK 5/8/2015 | 5:21:33 PM
Re: the jimmies I said the same thing three years ago yet nothing resulted, so I'm a bit cautious saying that again. But I still very much agree with the principles of that argument. 
KBode 5/8/2015 | 3:53:06 PM
Re: the jimmies No, I see all of these regional players like Cablevision and Bright House getting gobbled up in the next year or two without much regulatory fuss.
MordyK 5/8/2015 | 3:27:34 PM
Re: the jimmies true! hence my use of th eterm actions. Perhaps inaction would have suited better :)
mendyk 5/8/2015 | 3:21:41 PM
Re: the jimmies The franchise monopoly system wasn't mandated by the FCC -- it was more a local government thing -- but the FCC didn't raise any issues about it. That led to extreme balkanization of markets. It also made monopoly status the de facto norm in cable.  
MordyK 5/8/2015 | 3:11:08 PM
Re: the jimmies AGreed! If he can get the value of his programming assets like MSG guaranteed without his own cable company, I think he'll go for it. I don't see the FCC/FTC making it too difficult for any acquirer including Comcast.
KBode 5/8/2015 | 3:03:36 PM
Re: the jimmies I think so. They're kind of stuck at a point where they can't expand, they're making no money off of TV because of high programming costs, and they've probably tapped out the number of price hikes they can throw at consumers while admiteddly being behind the ball on next-gen speed offerings. Still, Dolan's just the type to demand way too much for his company's assets...
MordyK 5/8/2015 | 2:55:58 PM
Re: the jimmies Today the FCC may welcome overbuilding, but the historic reason for the lack of any real overbuilding competition is the result of the FCC's franchise actions in the 80's, which is unlikely to change.

Don't you just love government sanctioned monopolies?
MordyK 5/8/2015 | 2:52:28 PM
Re: the jimmies I recall reading around 2 years ago a report of Jim saying that at some point they will have to sell those assets. Perhaps this is the time?
KBode 5/8/2015 | 12:01:24 PM
Re: the jimmies Yeah, overbuilding into competing territories is something Tom Wheeler suggested at The Cable SHow this week, but that sort of added competition and expense is the very last thing any of those folks actually wants.

Meanwhile Cablevision has been a rumored acquisition target for the last fifteen years, so I guess I'll believe an actual deal when I see one.
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