Mergers, even failed ones, are expensive. That’s one of the big takeaways from Comcast’s Q1 2015 earnings report, which revealed that the cable giant’s unsuccessful attempt to acquire Time Warner Cable cost $336 million, all told. That obviously wasn’t spent overnight — it accounts for the total accumulation of “transaction-related costs,” the company told investors — but for a buyout that ultimately proved fruitless, the sum is an undeniably substantial one.
Breaking it down, Comcast noted $99 million was spent on the merger in the first quarter of 2015, $99 million in Q4 2014, $77 million in Q3 2014, $44 million in Q2 2014, and $17 million in Q1 2014. The $336 million figure, the company said in its earnings report, effectively accounts for all costs through the end of March of this year.
Time Warner Cable didn’t escape unscathed, either. It reported $200 million in “merger-related and restructuring cost” over roughly the past year, including $24 million in the Q1 2015. Last year, TWC spent $195 million on merger-related expenditures — about $50 million per quarter.
A majority of Comcast’s money went to lawyers and consultants, Comcast VP of Government Communications Sena Fitzmaurice told Ars Technica. “The costs are mainly for legal fees and outside consulting firms — everything from Human Resources and IT consulting to banks and management consulting service,” she said. Time Warner Cable also spent big on “legal and advisory fees,” but reserved a good chunk for expenses related to employee retention.
The numbers may sound gargantuan out of context, but Comcast saw a net income of $2.1 billion in the first three months of this year alone. Time Warner Cable (TWC), the smaller of the two, still brought in $458 million over the same period.
Exactly what Comcast is planning to do with the $45.2 billion it pledged to spend on the TWC buy is anyone’s guess, but perhaps the company will use it to expand its recently announced “Gigabit Pro” broadband plan, a 2Gbps offering for both downloading and uploading which kicks off next month in Atlanta. In what can be read as an effort to outbuild and outperform Google’s Fiber initiative, a 1Gbps offering that has been slowly expanding since its debut in Kansas City, Comcast has expressed plans to expand the service’s reach to 18 million Americans by the end of the year.
There are certainly other areas in need of improvement, as well. Comcast might consider extension of service into more rural areas of the country, for example, or improving the brand’s notoriously poor customer service experience for which it’s received page upon page of bad press. But those are just possibilities, of course — Comcast management knows best.
- More and more people cut the cord as cable TV companies struggle
- How to watch the 2018 Winter Olympics online
- Showtime comes to LG smart TVs, no cable subscription required
- AT&T has a cheap streaming service on the way, but it’s not for sports fans
- Smugglers used aerial drones to sneak $80 million in iPhones into China