Video services

Comcast, TWC Shareholders OK Deal

In a rapid vote conducted this morning, Time Warner Cable shareholders have given their blessing to the company's plan to sell out to Comcast.

Time Warner Cable Inc. (NYSE: TWC) shareholders also approved an advisory resolution that recommends a significant compensation package for top Time Warner Cable executives if the deal goes through. Today's procedure followed a similar vote by Comcast Corp. (Nasdaq: CMCSA, CMCSK) shareholders yesterday in which more than 99% of the stockholders approved the TWC takeover.

While today's endorsement by investors was widely expected, Time Warner Cable Chairman and CEO Rob Marcus still took the move as an opportunity to proclaim that "we have satisfied an important step in the merger approval process."

Still ahead for the two companies, however, is the challenge of securing federal regulatory approval. Most analysts still expect the deal to close successfully in early 2015, but the Federal Communications Commission (FCC) has at least temporarily paused its 180-day merger review clock in order to consider new documentation filed by Comcast. Susan P. Crawford, a Bloomberg columnist and former policy advisor to President Barack Obama, has pointed out that the FCC made a similar move when reviewing the proposed AT&T Inc. (NYSE: T)-T-Mobile US Inc. merger proposal three years ago, and that the deal was ultimately blocked.

Even as the Comcast/TWC review continues, both supporters and opponents of the deal have been vocal in filing their opinions with the Antitrust Division of the U.S. Department of Justice and the FCC. Supporters say a merger would give the new Comcast entity an opportunity to use its scale to bring more innovative services to more subscribers. Opponents argue that a deal would decrease competition in both the video and broadband markets, as well as stifle innovation from online competitors. (See CU Urges DoJ to Halt Comcast-TWC Deal.)

In the meantime, there was some pushback from individual investors in today's Time Warner Cable shareholder meeting on the matter of executive compensation. Several TWC execs are expected to receive a total of close to $135 million in "golden parachute" payouts if the merger with Comcast is completed. Although the majority of investors approved that plan, one shareholder took to the microphone to express her objections. On why CEO Rob Marcus shouldn't be entitled to a golden parachute of nearly $80 million, the shareholder declared: "I think you've already been paid too much, but that's my opinion." (See TWC Execs' Prize? A Cool $135M.)

— Mari Silbey, special to Light Reading

MikeP688 10/10/2014 | 3:29:49 PM
Re: Comcast Shareholders OK The merger was indeed to help create a "economies of scale" to forestall a death spiral.    They will still have a hand somewhat because even if we decide to pull the plug--they will still be the dominant player in providing the "pipe".  I find it stirking and "ironic" that Facebook CEO has to travel all the way to India to see the Indian Prime Minister while the issue of access and cost is still ever so prevalent here--and how we still remain not as vibrant as say a South Korea in the level of penetration for digitzation.


DHagar 10/10/2014 | 2:30:22 PM
Re: Comcast Shareholders OK danielcawrey, I like your positive view.  Agreed, there is lots of competition now.  I hope you are right - then we will all win!
danielcawrey 10/10/2014 | 2:00:20 PM
Re: Comcast Shareholders OK I'm not sure the merger will stifile competition. I think Comcast already has to contend with competition from streaming competitiors, not to mention the networks that are already offering their content online for people. 

I'm hoping that ultimately this will all mean better products and services overall in terms of content and internet options. We'll see if that comes to fruition. 
DHagar 10/10/2014 | 12:39:49 PM
Re: Comcast Shareholders OK msilbey, very interesting thoughts about the internal competition.  I think you are right - this will be a major undertaking that they will have their hands full for a while.

I agree with your thoughts about tv service and broadband; I do wonder, though, if they are going to approve the dominance in that space that this deal will give Comcast.  I will remember where I heard that it will go through - if you are right!
DHagar 10/10/2014 | 12:35:03 PM
Re: Comcast Shareholders OK jbtombes, agreed and their markets will align nicely (which is their justification for the deal).   My point was not as much that customer service within their network, but that because of their dominance, from their aligned markets, they may not have to compete any longer to serve the customer as much,

Your points are great about the internal issues as well.  They will have their hands full.
msilbey 10/10/2014 | 9:12:47 AM
Re: Comcast Shareholders OK Nice characterization of TWC as the foil for Comcast. I do wonder how Comcast will manage the new company organizationally once the deal goes through. So many different platforms and market strategies. I imagine there will be internal competition for quite a while. 

And yes, I do still think the deal will be approved. Ultimately all of these guys are setting up for competition at the national level. The old regional cable model for pay-TV doesn't make sense anymore. And for better or worse, TV service is tied to broadband service. 
jbtombes 10/9/2014 | 8:31:41 PM
Re: Comcast Shareholders OK it could be good for consumer short term, if better services follow. These two companies don't compete for those same consumers. But they do compete with each other in less tangible terms, such as talent, egos, ideas, architectures. Arguments over technology can be especially valuable. (See: recent history of CCAP.) Encouraging internal debate and experimentation while moving forward is not easy in any industry. If this deal closes, Comcast may want to internalize the role of foil that TWC has played over the years. 
DHagar 10/9/2014 | 4:00:49 PM
Re: Comcast Shareholders OK Mari,  sounds like a sweetheart deal for execs!

Interesting assessment of government approval for the merger.  It appears  to me that there might be growing opposition.  I find your comparison of filings, with the other deal that was blocked, interesting.  I am wondering if the tide isn't turning against them?

I still think the deal may be good for the companies, but I am not convinced it's such a good deal for the consumers.
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