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.
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