Market Leader Comcast to Purchase 2nd Place Time Warner Cable for $45.2B
February 13, 2014 12:08 AM
comment(s) - last by
Why compete when you can just merge and name you own prices?
Comcast Corp. (
) is expected to on Thursday officially announce a mind-blowing deal, which would mark the biggest consolidation in over a decade in
the cable television
and broadband internet market, if allowed. Comcast's bid will reportedly slot in at $159 USD per share of Time Warner Cable (
) stock, making the deal worth just over $45 billion.
The New York Times
are all reporting that the deal will be announced tomorrow. And most tellingly, NBC News -- whose parent company is owned by Comcast --
also is reporting
the deal will become official on Thursday.
The deal would create a market behemoth, merging together the first and second place competitors in both the TV and broadband internet markets.
Comcast has roughly a 25 percent share of the broadband market; TWC controls around 12 percent of the market [
]. Comcast currently controls roughly 19 percent of subscription cable TV market; TWC controls around 9 percent of it. Together the pair would control roughly a third (37 percent of broadband; 28 percent of cable TV) of two vital U.S. communications markets.
On a local scale the deal would be a massive win for Comcast and a massive loss for consumers, who would see scarce competition (Time Warner Cable vs. Comcast) reduced to none.
In all likelihood the deal will face lawsuits from the
U.S. Federal Communications Commission
(FCC) and the
U.S. Department of Justice
(DOJ) on antitrust grounds.
The Motley Fool
writer Anders Byland
wrote about this possibility
back in November 2013, when the bid was just a rumor. He titled his piece "The Time Warner and Comcast Merger Can't Happen. Here's Why."
In it he writes:
I would advise you not to hold your breath awaiting this business combination. Here's why.
Having Time Warner join forces with Comcast would create a massive cable operator. I mean an industry giant of epic proportions. Comcast serves nearly 22 million video subscribers, and Time Warner is No. 2 in the cable TV industry, with more than $11 million customers. The third-largest cable service provider is Cox Communications, with just 5.4 million households to its name.
You see the problem, right? In a total TV service market of 116 million households, including satellite subscribers and rabbit-ear antennae, Comcast wants to grow its market share from 19% to 28% in one fell swoop.
I don't think our regulatory bodies are going to like that idea.
Comcast's deal -- which it plans to do with all stock and no cash -- is slightly less than than the $160 USD/share price that TWC customers were targeting. But it's much better than $133 USD/share from Charter Communications Inc. (
), an offer which TWC
in mid-January. That deal would have perhaps stood more of a chance with regulators, though, given that Charter actually has fewer subscribers than TWC (or Comcast).
[Image Source: Reuters]
Unless federal regulators are asleep, this deal will almost certainly face far stiffer opposition. Comcast isn't exactly best friends with the FCC, which will likely work against it. The broadband provider famously
fought to kill federal regulators' net neutrality rules
in an appeals court.
Sources close to Comcast say it will divest 3 million cable subscribers (or about a tenth of the combined company's subscriptions). That's a small gesture, but it's probably not even on par with the measures AT&T, Inc. (
willing to concede
to had the DOJ and FCC
agreed to allow it eliminate/gobble up
its competitor T-Mobile USA (a Deutsche Telekom AG (
) subsidiary) in a similar deal. And we all know
how that story ended
The New York Times
This article is over a month old, voting and posting comments is disabled
who's the competition?
2/14/2014 8:22:28 PM
The only time the word "compete" is used, is Mick's lame heading. He then writes an article that never mentions the word "compete" and has to make up a fact so that he can use the word "competition" ONCE. But it is easy to understand why, these two companies DO NOT COMPETE with each other for customers. They are government sanctioned monopolies that operate in entirely different markets. Comcast gets this neighborhood and TW gets that neighborhood. The concept of Comcast-vs-Time Warner is a fantasy that everyone has wished for for so long that they actually believe it is true.
As a business decision, this merger cannot be argued against because they do compete against each other to purchase content. And content is the name of the entertainment game.
"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home
"Vampire" Mobile Media is Killing Cable TV -- Or Is It?
November 27, 2013, 9:24 AM
AT&T Tucks Its Tail Between Its Legs, Abandons T-Mobile Acquisition
December 19, 2011, 4:50 PM
DOJ Files Paperwork to Kill AT&T/T-Mobile Merger; AT&T, Sprint Respond
August 31, 2011, 11:21 AM
AT&T to Buy T-Mobile for $39 Billion USD
March 20, 2011, 2:52 PM
U.S. Federal Court Rules FCC Can't Stop Comcast From Throttling Traffic
April 7, 2010, 11:23 AM
Sony's Xperia Z3 Gets Detailed in Leaked Photos
July 25, 2014, 2:30 PM
Heavy Users of Verizon’s “Unlimited” LTE Data Could Soon See Targeted Throttling
July 25, 2014, 1:52 PM
Motorola Moto X+1 Makes Appearance in Leaked Photos
July 25, 2014, 12:06 PM
Sony Finally Adds 3D Blu-ray Support to PS4
July 24, 2014, 3:44 PM
IDC: Although Apple Remains at Top of Tablet Market, Share Falls from 33% to 26.9%
July 24, 2014, 1:24 PM
Thanks in Part to Strong G3 Launch, LG Sells 14.5 Million Smartphones in Q2
July 24, 2014, 10:18 AM
Most Popular Articles
JJ Abrams Unveils X-Wing Starfighter for New "Star Wars" Movie
July 21, 2014, 12:24 PM
Ford Details ’15 F-150’s 325hp, 2.7L EcoBoost V6; Demonstrates 732-lb Weight Loss
July 22, 2014, 6:55 PM
Comcast Memo: Harassing Customers During Retention Calls Actually IS Our Policy
July 22, 2014, 5:19 PM
Kindle Fire Phone Review Roundup -- A Solid "Meh"
July 23, 2014, 2:09 PM
Motorola Moto G Successor Reportedly Uncovered, Moto X Discounted by up to $75
July 21, 2014, 1:11 PM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information