Friday, March 13, 2015

More Cable Consolidation In 2015

With Comcast buying Time Warner Cable and AT&T buying DirecTv, the cable oligopoly continues to grow smaller.  The latest acquisition plan comes from Charter Communications.  There is speculation that they will bid to acquire Bright House Networks, a mid-size cable operator with about 2.5 million subscribers.  That could potentially bring Charter to over 6 million subscribers as well as increase the size of its footprint. 

Putting another cable operator in play also brings up the notion that other cable operators could be buyers or sellers.  Of those, the biggest question mark is Cablevision Systems, with over 2.5 mm subscribers, mainly in the New York DMA and a highly desirable market.  Cox Communication, with over 4 million customers and systems spread across the US, from New England to California, could also be of interest.  There are still a number of smaller cable operators with more regional footprints that might finally decide to seek a buyout partner.

While the FCC still mulls the fate of the two big acquisitions above, as well as work with new net neutrality rules, their plate could only get fuller.  Cable and broadband infrastructure across the US requires size to gain efficiency.  These deals only seek to build larger footprints to capitalize on cost efficiencies and revenue gains.