2ND UPDATE, 12:25 PM: The WGA West has weighed in on the divestiture plan between Comcast and Charter — and it isn’t mincing words. Here’s the guild’s just-released statement — judge for yourself: “Today’s announcement from Comcast would, in essence, lead to the creation of a three-company cable cartel. Masquerading as subscriber divestitures, the agreement with Charter brings together the three largest cable providers, who account for 38% of cable subscribers and 45% of Internet subscribers. The decision of these three powerful companies to divide markets and share ownership of subscribers through a new publicly traded corporation is unprecedented and adds to the mounting evidence against the Comcast-Time Warner Cable merger.”
UPDATED: Looks like Charter will become the cable king of middle America, while Comcast tightens its hold on major markets, in this morning’s deal. Comcast will pick up Charter systems in California, New England, Tennessee, Georgia, North Carolina, Texas, Oregon, Washington and Virginia. Meanwhile, Charter will acquire Time Warner Cable franchises in Ohio, Kentucky, Wisconsin, Indiana, and Alabama — and manage others in Michigan, Minnesota, Indiana, Alabama, Eastern Tennessee, Kentucky and Wisconsin that it will partly own in a new Comcast spinoff company. Here’s the map the companies released showing holdings for Charter and the new Charter-managed spinoff from Comcast (for now referred to as “SpinCo”) after the deal, which CEO Tom Rutledge says will make his company No. 1 in 10 states.
PREVIOUS, 3:18 AM: The terms pretty much match earlier reports about the companies’ discussions. Assuming the feds approve Comcast’s $45B acquisition of Time Warner Cable, the cable giant would: (1) Sell systems with 1.4M TWC subs to Charter, making it the No. 2 operator. (2) Swap with Charter systems that include 1.6M subs. (3) Create a spinoff company with 2.5M subs that would be 33% owned by Charter. “The realignment of key cable markets achieved in these transactions will enable Comcast to fill in our footprint and deliver operational efficiencies and technology improvements,” Comcast CEO Brian Roberts says. While the companies didn’t put a dollar value on the deals, analysts have estimated it at about $20B. Comcast and Charter will disclose more info later this morning in a call with analysts.
Here’s their release: Read More »