Monopoly anyone? Comcast and Charter may team up to buy ailing Time Warner Cable

comcast charter may team buy ailing time warner cable logo edit

Six months ago, rumors began to swirl that cable TV operators might consolidate in an effort to fight back against the increasing costs content providers were demanding. At the time, it was speculated that Time Warner Cable (TWC) might lead the charge. But it appeaers the tables have turned. Now the question of the hour is: who’s going to buy TWC; Charter, or Comcast? According to a new report by Bloomberg, maybe both.

The entangled tale of the possible buyout has moved very quickly over the last few days. It began Thursday when The Wall Street Journal reported that rural cable provider Charter Communications was advancing on a proposed plan from last June to secure funding for a possible bid for TWC. The report sent stocks rising Friday, both for TWC and Charter. 

The following day Comcast subsidiary CNBC reported that the nation’s largest cable provider was checking with FCC and anti-trust advisers about its own bid for Time Warner, which would add around 12 million new customers to its already massive stock of 22 million subscribers, giving the company an unprecedented wealth of power and influence over the industry at large. The report also cited sources claiming that Time Warner considered Comcast a more preferable buyer than Charter.

Finally, Bloomberg’s report confirmed that talks between Charter and Comcast have emerged to strategize about a possible joint acquisition of Time Warner, doling out the pieces between the two to bolster each company’s coverage and subscriber bases. The news also sent stocks rising for Comcast Friday, making it a pretty good day to be in the cable business for investors.

The alliance could potentially allow Comcast to avoid the ire of both the Justice Department and the FCC over anti-trust concerns, though whether or not even a tandem merger would be given the green light is still unclear. As for Charter, Comcast’s partnership would allow the $28 billion company to take on less financial risk in raising the estimated $61 billion needed to acquire TWC.

Time Warner is currently the second largest Multi-system operator in the nation, but has been hemorrhaging subscribers recently due to a month-long showdown with CBS, along with other purported misfires by management. According to MultiChannel News, TWC lost a record 306,000 residential video subscribers in the third quarter. That makes the company weak, and its assets are an alluring prize that has apparently set the other MSO’s circling.

However the deal shakes out, the possible buyout and further consolidation of the cable industry may be good for business, but it could be bad for consumers, especially if Comcast is in the mix. The potential merging of the two biggest cable companies in the country has raised real concern from consumer analysts, who fear the move would give Comcast far too much power.

For now, it’s all still up in the air, and there’s no guarantee anything will proceed. But any deal for Time Warner is sure to have serious repercussions in the industry. We’ll keep an eye on this evolving story as it continues to develop, so stay tuned.

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