& cplSiteName &

Could Comcast Nix a SeaChange Sale?

Jeff Baumgartner

12:05 PM -- As Arris Group Inc. (Nasdaq: ARRS) tries to buy SeaChange International Inc. (Nasdaq: SEAC), it turns out Comcast Corp. (Nasdaq: CMCSA, CMCSK) could influence whether the deal can even go down. (See Arris Sets Sights on SeaChange .)

As part of their 2006 agreement, Comcast gets a "right of first offer" to buy SeaChange's VoD business, should SeaChange decide to sell that business or its assets. And, if SeaChange gets bought outright, the new owner (Arris, in this possible case) would be required to give Comcast a perpetual license to the VoD software.

Back then, this kind of contingency language was not considered a path of future action; it was protection Comcast wanted in there just in case someone like Verizon Communications Inc. (NYSE: VZ), one of SeaChange's other big customers, tried to buy SeaChange and upset the balance of technology power.

I've asked SeaChange and Comcast if that clause is still active … the deal is four years old, after all.

I seriously doubt that Comcast would object to Arris buying SeaChange, since it does lots of business with Arris already, but the contingency language is in there, so I'm drawing some attention to it.

Buying vendors to gain control of the fate of its products isn't exactly foreign to Comcast, either. It now owns the bulk of what used to be called Liberate Technologies, a set-top software and ITV apps company, and has folded it into the wholly owned TVWorks LLC unit. SeaChange, by the way, bought Liberate's international assets in 2005. (See SeaChange Buys Liberate European Unit and Cox Severs Ties to TVWorks.)

Some other companies Comcast bought to shore up its in-house portfolio of strategic technology assets: thePlatform Inc. and Plaxo. [Ed note: Can you think of any others?]

Arris motivation
Separately, Yoav Schreiber of Current Analysis notes on Twitter that Arris could also be coveting SeaChange's penetration of the telco and wireless markets.

An important point, because Arris's historic Achilles heel has been its reliance on cable business -- particularly from Comcast and Time Warner Cable Inc. (NYSE: TWC). If either of those two catches a cold, Arris tends to get pneumonia. It's happened several times, and its stock has taken big hits as a result.

SeaChange would give Arris a bit more customer diversity thanks to its deals with Verizon and Virgin Media Inc. (Nasdaq: VMED), to name just two of the bigger ones.

— Jeff Baumgartner, Site Editor, Light Reading Cable

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Jeff Baumgartner
Jeff Baumgartner
12/5/2012 | 5:04:00 PM
re: Could Comcast Nix a SeaChange Sale?

Forgot about this one... TVWorks (now wholly owned by Comcast, but formally a JV with Cox) bought MetaTV, another ITV company, back in 2005. JB

Jeff Baumgartner
Jeff Baumgartner
12/5/2012 | 5:03:55 PM
re: Could Comcast Nix a SeaChange Sale?

Comcast and SeaChange reupped their software subscription deal  in 2009, but SEAC isn't disclosing or commenting on what kind of contingency language is baked into that deal. JB



More Blogs from The Bauminator
But platforms that bundle streaming video services, backed by single sign-on systems, could benefit both OTT and pay-TV players alike.
Concerns about new direct-to-consumer competition alongside pressure on Netflix's pricing power is misunderstood or overblown, contends LightShed Partners analyst Richard Greenfield.
The 10G future is in sight, HFC has gas in the tank, Comcast is getting serious about network virtualization, DOCSIS's pioneers get recognized and more from last week's show in The Big Easy.
New name and logo will adorn devices that conform to an emerging next-gen broadcast TV signaling standard designed to support 4K interactivity and aimed for widespread deployment in 2020.
Under fire from US broadcasters, Locast is appealing for funds to help it mount a legal defense, a move that was attempted eight years ago by Ivi Inc., an OTT-TV company that was sued out of existence.
Featured Video
Upcoming Live Events
October 22, 2019, Los Angeles, CA
November 5, 2019, London, England
November 7, 2019, London, UK
November 14, 2019, Maritim Hotel, Berlin
December 3-5, 2019, Vienna, Austria
December 3, 2019, New York, New York
March 16-18, 2020, Embassy Suites, Denver, Colorado
May 18-20, 2020, Irving Convention Center, Dallas, TX
All Upcoming Live Events