Brace yourself for a bitter fight over media conglomeration: The No. 1 cable company and owner of NBCUniversal has a deal with Time Warner Cable to buy it for stock valued at $159 a share, beating Charter Communications’ $132.50 cash-and-stock bid, CNBC’s David Faber reports at the news channel’s website. The deal is set to be announced tomorrow morning, he says. (Comcast owns CNBC.) Each share of TWC, which closed today at $135.31, would be exchanged for 2.875 Comcast shares, which closed at $55.24. That would translate into about $44.2B (not including debt) vs. Charter’s $37.4B bid, which TWC rejected as inadequate. If consummated, a deal would add TWC’s 11.2M video subscribers to Comcast’s 21.7M and give the cable colossus coveted franchises in Manhattan and Los Angeles.
Related: Charter Increases Pressure On Time Warner Cable, Offering 13 Pro-Merger Board Candidates
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Is this one of the products that Apple CEO Tim Cook has promised will wow consumers and investors this year? The electronics company is negotiating with the No. 2 cable operator and others who can feed content … Read More »
This should add some excitement to Time Warner Cable‘s next shareholders’ meeting. Charter has several highly regarded cable execs — including former TWC Chief Technology Officer Jim Chiddix, former Charter CTO Marwan Fawaz, and Oxygen Media co-founder Lisa Gersh – in its collection of independent candidates for the No. 2 cable company’s board. They’d support Charter’s $61.3B (including debt) cash and stock takeover offer. In addition, Charter hopes to head off efforts by TWC to adopt anti-takeover protections. It proposes to fix the size of the board at 13 and repeal any by-law amendments made without shareholder approval since July 26, 2012, the last time TWC disclosed any change to its by-laws. “It is clear from our meetings with Time Warner Cable shareholders that there is an overwhelming desire to combine these two companies to increase Time Warner Cable’s competitiveness,” says Charter CEO Tom Rutledge. “Our purpose in this proxy contest is to enable shareholders of TWC to raise their voice, and to provide a very capable board who will hear them.” TWC says that Charter made a “grossly inadequate” bid by offering the equivalent of $132.50 a share; TWC considers $160 closer to the mark. “It is clear that Charter is nominating a slate of directors for the sole purpose of pressuring our Board into accepting the same lowball offer that it previously considered and unanimously rejected,” TWC chief Rob Marcus says. “Our Board remains focused on maximizing shareholder value. We are confident in our strategic plan, which was detailed publicly on January 30, and we are not going to let Charter steal the company.” TWC shares opened this morning up slightly at $136 — suggesting that investors believe that Charter, or someone, will offer more.
Here are Charter’s candidates for the TWC board with its description of their backgrounds and qualifications: Read More »
UPDATE, 6:30 PM: The cabler said tonight that it is offering a “gift of appreciation” to SoCal subscribers whose signal went out for more than an hour during Sunday’s Big Game. But will credit for one free VOD movie — or a five-buck gift card for analog subs — placate disgruntled football fans and party hosts? “Although most of our customers didn’t experience an interruption, we want to express our sincere apologies to all Time Warner Cable TV customers in the Los Angeles area,” SVP Operations Deborah Picciolo said in a release. “We didn’t live up to our standards for a quality customer experience. We know there’s no way to undo the inconvenience of last night’s outage, and we want them to know how truly sorry we are for this issue.”
Super Bowl: The Good, The Bad, The Ads
PREVIOUSLY, Sunday PM: Some Time Warner Cable customers in Southern California who weren’t watching the Big Game in high def missed out on parts of the Super Bowl and Bruno Mars-Red Hot Chili Peppers halftime show, TWC confirmed Sunday evening. (If you missed the halftime show, here’s Mike Fleming’s recap.) Read More »
In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom catch up on the many highlights from earnings season announcements, beginning with those by possible dance partners Comcast and Time Warner Cable and what their news might mean for Comcast’s takeover bid. They also take the market temperature on Viacom and tech giants led by Google — which sold off its Motorola Mobility unit after owning it just two years — and Facebook, Apple, Yahoo and Amazon. They also look at exhibitors’ demands for shorter movie trailers and whether studios will play along.
Listen to the podcast in your choice of audio formats here:
Deadline Big Media podcast 70 (.MP3 version)
Deadline Big Media podcast 70 (.M4A version)
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UPDATE, 9:40 AM: New York Rep. Michael Grimm told a gaggle of reporters outside his office this morning he expects his mother to remind him he was not raised to threaten to throw reporters off of balconies. and that he’s scheduled a lunch with the NY1 reporter to whom he made the offer, Meanwhile, NY1 reporter Michael Scotto tweeted he’s accepted Grimm’s apology.
PREVIOUS, 7:53 AM: Time Warner Cable landed one of the biggest scoops of the State of the Union address last night, when a congressman offered to throw one of its reporters off the balcony in the hall, and/or break him in two, during a post-address interview (see video below). It’s believed to be a State of the Union Address first and understandably is the subject of some talk on the morning news show circuit today. “He did seem angry, he seemed angrier than I have ever seen a politician talk to a reporter about a question that he or she didn’t like,” NY1 reporter Michael Scotto reminisced this morning on MSNBC’s Morning Joe.
“He” is New York Rep. Michael Grimm, whose campaign finance issues have been of interest to some news outlets of late — the FBI arrested his fundraiser Diana Durand earlier this month, according to published reports. Scotto told various TV news outlets this morning that Grimm has been dodging the media but, after President Obama’s speech last night, he agreed to give Scotto an interview — at the end of which Scotto tried to ask him about allegations about his campaign finances. Grimm can be seen telling Scotto he won’t discuss anything but the POTUS speech and the stalking off. Scotto may have pitched it a little too strong to his viewers when he wrapped up with: “Congressman Michael Grimm does not want to talk about some of the allegations concerning his campaign finances, we wanted to get him on camera on that, but he, as you saw, refused to talk about that. Back to you.”
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Comcast would snag New York City, New England, and North Carolina properties from Charter if it succeeds in buying Time Warner Cable, Bloomberg reports citing “people with knowledge of the matter.” Comcast and Charter “have a … Read More »
It’s a PowerPoint smackdown. Charter just posted one of its own to respond to Time Warner Cable’s slide deck explaining why it rejected the smaller cable company’s cash and stock offer of $132.50 a share or $61.3B (including debt), which it deems “grossly inadequate.” … Read More »
Time Warner Cable had better come up with a PR strategy soon. Based on the withering criticisms that Charter execs just leveled in a presentation to Wall Street — part of a campaign to rally support for their $61.3B … Read More »
Over the last two years Time Warner Cable‘s video subscriber losses equal the size of its Los Angeles market, Charter Communications chief Tom Rutledge told CNBC’s David Faber this morning. The appearance is part of Rutledge’s campaign to persuade TWC shareholders to endorse his company’s $61.3B … Read More »
UPDATE, 4:30 PM: Let the debate begin. Time Warner Cable CEO Rob Marcus says he’s willing to sell the No. 2 cable operator — but Charter’s $132.50 a share offer, valued at $61.3B including debt, is “a non-starter” that … Read More »
Greg Maffei‘s comment today at an investor meeting sponsored by Citi resonates because his company is the leading shareholder in Charter Communications, which is preparing to make a bid for Time Warner Cable. It would be a risk, the Liberty CEO says, because “we’re being asked to pay for assumed synergies” including the possibility that Charter could reduce content and marketing costs. “Can they happen fast enough will be the real key.” But Maffei notes that “there’s also an opportunity to run the reported asset [TWC] better” adding that it “has not performed as well as Comcast and what [Charter CEO Tom Rutledge] and his team have been able to do.” Consolidation makes sense because “15, 20 years ago we did not have scaled national competitors [including satellite companies] and you didn’t have over the top [Internet competition].” Cable now faces those threats, as well as “a new set of reinvigorated cable opportunities [that] come from working together and building scale…Some of that is from consolidation and some of it is from confederation.” He acknowledged that Liberty’s new proposal to buy the 47% of Sirius XM that it doesn’t already own would give it access to the satellite radio company’s cash flow, and that could help if Charter goes after the much-larger TWC. “It says in the future there’s a lot more flexibility.” Liberty also wants to adjust its own strategy. “Eight years ago, when I joined, Liberty Media was a complete mish mash…We didn’t have controlling stakes in pretty much anything except for QVC and we had enormous tax problems trying to unwind some of those stakes.” Now that those problems have been fixed “we needed a new game.” The problem is finding an investment that makes sense in the digital age, where it’s hard to find businesses that look like they can continue to grow for a decade or more. “That may work for Coca Cola” — but it’s “unlikely that everything that sits in [Liberty] is going to be sitting there in 5 or 6 years because there’ll be change.” Read More »
One in a series of Deadline stories that look back on 2013 and ahead to 2014.
Some of 2014′s most important sporting events won’t take place on a grassy field or an indoor court. They’ll play out in board rooms as TV execs continue their struggle to balance the diverging interests of those who love sports, and others who don’t — but still have to subsidize the programming as part of the pay TV bundle. Sports accounts for about 33% of cable and satellite company programming costs, Barclays Equity Research’s Kannan Venkat estimates. That percentage will grow: Sports prices are rising about 10% a year while other channels rise about 7%. DirecTV CEO Mike White says consumer frustration could soon begin to boil. “There’s a point where you have to stand up for the 99% who are angry about their bills.”
Will 2014 be the year when distributors make a serious effort to slow their rising sports costs? It’s possible, especially in dealings with regional sports channels — particularly in Los Angeles. Time Warner Cable is about to introduce a service for Dodgers games, SportsNetLA, following its launch last year of SportsNet and Deportes which show Lakers games. The cable company is said to want other distributors to pay $5 per subscriber per month for the Dodgers, roughly the same price MSG charges for its regional service that offers the New York Knicks and Rangers. But so far other distributors have not stepped up to the plate. DirecTV could help everyone hold out; the No. 1 satellite company has led the charge against high-priced regional sports networks. It declined to carry the Pac-12 Network which is home to two schools (UCLA and USC) in the key LA market, the University of Texas’ Longhorn Network, and Comcast-owned sports services in Portland, Philadelphia and Houston. (The Houston network filed for Chapter 11 bankruptcy protection in September.)
Related: TWC Sued For Passing Lakers-Dodgers Costs On To Customers
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Related: Year-End: Will Big Media Companies Hit Stride, Or Peak, In 2014?
Deadline Financial Editor David Lieberman and host David Bloom look ahead to the six big questions facing big media after a big 2013, as potentially huge changes loom in the coming year. What does 2014 hold for Netflix, Apple, cable TV consolidation and the broader pay-TV industry, local broadcasting and theatrical exhibition? Lieberman puts on his fortuneteller hat and looks at what paradigms could be shifting.
Deadline Big Media podcast 65 (.MP3 version)
Deadline Big Media podcast 65 (.M4A version)
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With mere days to go before their latest deal expired, Time Warner Cable and Viacom announced a new carriage agreement today. Among keeping the Viacom channels on for New Year’s, the near last minute multi-year deal adds premiere cabler EPIX to the TWC lineup for the first time. “Our new agreement offers consumers a comprehensive collection of innovations across platforms, including the availability of EPIX and access to Viacom’s vast array of popular content within the Television Everywhere environment both in and out of their homes,”said Viacom President and CEO Philippe Dauman in a statement Tuesday. Specifics of the new agreement were not disclosed, but you can read the release here:
Related: Were Consumers The Biggest Losers In The CBS-TWC Dispute? Read More »
The offer will consist of cash and stock valued at less than $135 a share — lower than the $150+ that some analysts anticipated — Bloomberg reports, citing “a person with knowledge of the matter.” That would be … Read More »