Cablevision Systems Corp. - It's Time To Sell The Bonds
Downtown Investment Advisory • 10 Comments
Downtown Investment Advisory • 10 Comments
Cablevision Continues Its Battle For Relevance
Cablevision Is In Decline
Dec. 7, 2015, 7:45 PM
- Union workers are formally objecting to Altice's (OTCPK:ATCEY) $17.7B bid for Cablevision Systems (NYSE:CVC) as not being in the public interest.
- The Communications Workers of America represents some 300 Cablevision workers and has filed its objection with the FCC.
- It's worried about substantial downsizing coming from the heavy debt load in the deal; whatever the reason, Altice (which has a slasher's reputation) had signaled in September that heavy cost cuts would come early and often at Cablevision as the parent aimed for $900M in reductions per year.
- Cablevision spends about $49/month in operating expense per customer, while at Altice's French cableco Numericable-SFR, the figure is $14/month per customer.
- “Altice takes on too much debt, outsources as much work as possible and then downsizes its workforce," said CWA's Dennis Trainor. "Customers get worse service and employees lose their job. Unless Altice makes commitments to protect customer service and Cablevision employees, the FCC should reject this deal.”
Dec. 4, 2015, 7:10 PM
- The spread of consumer hardware for TV viewing, including Roku devices and Apple TV as well as next-gen gaming consoles, could kill off set-top boxes and ease capex for cablecos.
- Analyst Craig Moffett sees costs decreasing for major pay-TV providers not only due to the boxes, but also once they complete a transition to next-gen transmission technologies, likely by 2019.
- Boxes won't go extinct, but the rapid uptake of consumer hardware means the providers will see lower customer premise equipment costs -- in some cases by quite a bit, he argues.
- "The idea that customers will eventually consume video through their own Apple TV or Roku boxes, or simply connect their cable to their smart TVs, Xboxes and Sony PlayStations, is neither new nor far-fetched," Moffett says. "There are good reasons to believe that CPE spending may come down significantly in future generations."
- Time Warner Cable (TWC +1.8%) began supporting Roku-only cable service in New York City last month. Assuming its takeover by Charter (CHTR +2.1%) goes through, the combined company's CPE spending could drop to $917M by 2019, from $2.97B this year, Moffett says. Pro forma capital spending at Charter will fall to $5.83B in 2019 from an estimated $6.97B today.
- He estimates Comcast (CMCSA +1.9%) CPE spending will drop to $1.6B in 2019, from $3.7B this year.
Nov. 12, 2015, 3:23 PM
- With investors rattled a bit by a spate of debt-fueled deals and a tough market in France, Altice (OTCPK:ATCEY) says that the business at Numericable-SFR (OTCPK:NUMCF) will turn around in 12-18 months as it works on quality control in the ongoing price war there.
- "We are confident that we'll resolve the quality and churn issues in coming quarters," said CEO Dexter Goei at the Morgan Stanley TMT conference in Barcelona.
- The company has boosted investments to repair a network left behind by Vivendi after a late-2014 changeover.
- Altice is taking on significant debt to launch its presence in the United States, via acquisitions of Suddenlink, for $9.1B, and Cablevision (CVC -0.2%), for $17.7B.
- Previously: Cablevision -0.7% as Q3 revenues decline and miss (Nov. 03 2015)
- Previously: Altice slips as revenues fall 2.9% (Oct. 28 2015)
- Previously: Numericable-SFR revenues down 3.5% amid French price war (Oct. 28 2015)
Nov. 3, 2015, 5:32 PM
- Cablevision Systems (NYSE:CVC) is off 0.7% after hours following Q3 results that showed revenues that missed expectations and consolidated operating income that fell 27.5%.
- Income was affected by $33.8M in unfavorable items tied to a reserve for a class action settlement and an inventory valuation adjustment; excluding that, revenues would have fallen 0.6% and operating income would have declined 14.1%.
- Revenue by segment: Cable, $1.45B (down 0.8%); Lightpath, $91.2M (up 3.8%); other, $83.6M (down 5.6%).
- Cable total customers (number of households/businesses) came to 3.11M (down 0.7%); video customers were 2.6M (down 4.1%); high-speed data customers were 2.78M (up 1%); voice customers of 2.19M (down 2.3%).
- Shares closed today at $32.44 -- vs. Altice's acquisition price of $34.90/share. The acquisition is expected to close in the first half of 2016.
- Cablevision is discontinuing conference calls and suspending stock repurchases due to the pending acquisition, and doesn't anticipate declaring or paying any dividends.
Nov. 3, 2015, 4:36 PM
- Cablevision Systems (NYSE:CVC): Q3 EPS of $0.08 may not be comparable to consensus of $0.23.
- Revenue of $1.61B (-1.2% Y/Y) misses by $30M.
Nov. 2, 2015, 5:35 PM
- ACHC, AFG, AIV, AMSG, ASH, ATVI, AWR, BIO, BKH, CBPO, CBS, CERN, CHEF, CHUY, CIM, CKP, CSU, CSV, CVC, DAC, DENN, DHT, DK, DKL, DVA, DVN, ECYT, ENPH, ENSG, EPIQ, ETSY, EVRI, FANG, FARO, FIVN, FLTX, FMI, FOGO, GHDX, GMED, GRPN, HCI, HL, HLF, HRZN, IAG, IPHS, IRWD, ITRI, IVR, JCOM, KEG, LLNW, MPO, MTZ, MXL, MYGN, NFX, NYMT, OAS, OCLR, OESX, OFIX, OKE, OKS, ORA, PAA, PAGP, PAYC, PBPB, PKD, QUAD, REGI, RIGL, RLOC, RP, RPAI, RXN, SLW, SSNI, SUPN, TDW, TMH, TSLA, TSRA, TX, UNTD, USNA, VNDA, WBMD, WR, WTR, X, XEC, XOXO, XXIA, Y, ZAGG, ZEN, ZNGA
Oct. 27, 2015, 11:28 AM
- Exercising an option, Canada Pension Plan Investment Board and BC Partners with co-investors have committed to buy a 30% stake in Cablevision (CVC +0.8%) for about $1B -- adding the final piece to Altice's (OTCPK:ATCEY) financing for its $17.7B Cablevision takeover, Altice says.
- The two entities will each fund 12% of the Cablevision acquisition, with the balance provided by co-investors. Altice had previously planned a $6.3B debt offering and a $1.8B new-share offering while Cablevision marketed a $2.3B acquisition loan.
- The new deal is connected to Altice's $9.1B takeover of Suddenlink, in which CPPIB and BC Partners sold a 70% stake to Altice.
- The CPPIB and BC Partners Cablevision transaction is expected to close in the first half of 2016.
Oct. 26, 2015, 12:24 PM
- Saying he's "concerned," New York's attorney general is asking three Internet providers to prove that customers are getting the access speeds they were promised, especially on the higher end.
- Time Warner Cable (NYSE:TWC), Cablevision (NYSE:CVC) and Verizon (NYSE:VZ) have each gotten a request from AG Eric Schneiderman to provide some extensive details, on total broadband customers since 2011 and their service levels as well as customer complaints and copies of their interconnection deals.
- "New Yorkers deserve the Internet speeds they pay for. But, it turns out, many of us may be paying for one thing, and getting another," the statement from Schneiderman's office says. The three companies each expressed confidence that they were providing speed as promised.
- The interconnection deals may be key to the probe, as past studies have shown that service tended to suffer where providers connected with longer-haul carriers.
Oct. 20, 2015, 11:27 PM
- Richard Plepler, CEO of HBO (NYSE:TWX), had talked nicely in the spring about whether the launch of stand-alone service HBO Now would antagonize the network's longtime cable partners: "We see this as an expansion of the pie, not cannibalistic at all of our current business."
- Now he's speaking a little more directly: “If you’re Brian [Roberts, CEO of Comcast (NASDAQ:CMCSA)] and you have 6M broadband subs, why would you not bundle HBO and share that revenue with us? Why would you give up that real estate and not be paid for it? I don’t understand it," Plepler said tonight in a keynote in Laguna Beach, Calif.
- Comcast, along with to-be-merged Charter (NASDAQ:CHTR) and Time Warner Cable (NYSE:TWC), don't offer HBO Now. Cablevision (NYSE:CVC) and Verizon (NYSE:VZ) do.
- In comments reported by Variety, Plepler went after distributors who were leaving money on the table: “Some of our partners are not as skilled at that, and I think that’s myopic on their part,” he said.
- Previously: HBO CEO: Direct streaming a play for millennials (Mar. 31 2015)
- Previously: HBO-Apple deal a year in the making; cable partners still a challenge (Mar. 09 2015)
Oct. 16, 2015, 5:31 PM
- Cablevision (CVC -0.3%) and Viacom (VIA +0.9%, VIAB +1%) say that they have resolved their legal fight, and are "entering into mutually beneficial business arrangements."
- The move means Cablevision is dropping a lawsuit it filed a couple of years ago over bundling and carriage. Cablevision accused Viacom of charging exorbitant fees if it didn't carry 14 less popular channels, like Logo and Palladia, along with its flagship networks (MTV, Nickelodeon, Comedy Central, BET).
- Viacom's ratings have been flagging this past year at a time when big providers are facing "skinny bundling" challenges with many consumers selecting smaller channel lineups.
Oct. 14, 2015, 11:49 AM
- French media giant Altice (OTCPK:ATCEY) -- in the middle of a $17.7B pursuit of Cablevision (NYSE:CVC) -- should be trading about half of where it is today, ION Asset Management says in making its short case.
- The company is overpaying for its acquisitions, said Stephen Levey and Jonathan Half at the Sohn Investment Conference in Tel Aviv, and they're doubtful about Altice's targets for margins and cost-cutting.
- Altice's Patrick Drahi has suggested heavy cuts are on the way for Cablevision, to the tune of $900M annually.
- The company is also in Israel via its ownership of cable operator HOT.
- Shares closed down 0.2% at Euronext Amsterdam.
- Previously: Next for an Altice-controlled Cablevision: Heavy cost cuts (Sep. 18 2015)
Oct. 3, 2015, 6:35 PM
- As part of Altice's (OTCPK:ATCEY) deal to acquire Cablevision (NYSE:CVC), P-E firm BC Partners and the Canada Pension Plan Investment Board are in discussions to acquire more than $1B in Cablevision shares, a move that could help Altice with the finances of the deal.
- The two have an option to buy as much as 30% of Cablevision's equity.
- Concerns over the debt necessary to complete the takeover have hounded the bonds of Altice and Cablevision since the deal was announced. Altice planned a $6.3B debt offering and raised $1.8B in a new share offering this week, while Cablevision marketed a $2.3B acquisition loan.
- Previously: Report: Altice scaling back on bond offering for Cablevision buy (Sep. 25 2015)
- Previously: Cablevision bonds keep sliding; Altice planning $6.3B debt offering (Sep. 22 2015)
- Previously: Bloomberg: Cablevision marketing $2.3B acquisition loan (Sep. 21 2015)
Oct. 2, 2015, 1:58 PM
- Is it over? A seemingly endless legal back-and-forth over Internet speed advertising between Cablevision (CVC +0.7%) and Verizon (VZ -0.6%) looks to be settled after months of claims and counterclaims.
- Cablevision sued Verizon in January over ads for the "fastest Wi-Fi available," beginning a series of attack ads and legal maneuvers between the two, including a new suit in May and a transferred case in June.
- August brought a win for Verizon with a temporary restraining order against Cablevision's ads.
- Cablevision may be settling all (Dolan) family business now that it has a deal in place to be bought by France's Altice.
Sep. 25, 2015, 7:15 PM
- With investors grimacing at the leverage being marshaled, Altice (OTCPK:ATCEY) is scaling back on a debt offering to help fund its $17.7B acquisition of Cablevision Systems (NYSE:CVC), the Financial Times reports.
- Altice has boosted the yield offered and reduced a planned offering by $1B, to a total $5.3B. Cablevision marketed a $2.3B acquisition loan as well, and its bonds have been tumbling since the deal's announcement, with yields jumping by about 200 basis points.
- Some of the new debt is getting 10%-plus yields. Altice aims for a debt/EBITDA of five times; the Cablevision deal would boost that ratio to seven times, and there's some skepticism that Altice can reduce costs as much as planned.
- Elsewhere, Altice CEO Dexter Goei said this week that though the company is hungry for acquisitions, it's liable to pause for a while -- a few months to a couple of years -- as it digests the deals for Suddenlink and Cablevision and focuses on leverage. But: "The only thing that would make us scratch our heads is if Cox came up and said 'I'm going to auction my business.' " Private Cox isn't on the block, at the moment.
Sep. 22, 2015, 6:10 PM
- Debt of Cablevision Systems (CVC -0.2%) is continuing to slide, as acquirer Altice (OTCPK:ATCEY) is reported to be planning a $6.3B bond offering for its takeover.
- Cablevision bonds have been falling since the deal's announcement, and deepened their decline yesterday as Cablevision began to market a $2.3B acquisition loan. Moody's and Standard & Poor's had placed ratings for Cablevision on review for downgrade due to the leverage involved in making the deal happen.
- Cablevision's 5.875% notes due September 2022 fell to 78.9 cents on the dollar (10.2% yield).
- If Altice offers the bonds through an entity that it plans to merge with Cablevision's operating unit CSC Holdings, Bloomberg reports, it would add to CSC's $5.6B debt load.
Sep. 21, 2015, 6:56 PM
- The Dolan family's choice to cash out of Cablevision (NYSE:CVC) is creating a big win for shareholders, Morningstar says, as Altice (OTCPK:ATCEY) has offered more than Cablevision was worth going it alone.
- The company's well entrenched in the Northeast, Michael Hodel writes, though the easy growth is likely over, and Verizon is going to put steady pressure on Cablevision's share.
- Comcast and Time Warner Cable have yet to match Cablevision's 40% penetration of Internet access, and it's taken advantage of a high-income customer base in New York City, but the New York market is a double-edged sword, Hodel says, because of Verizon's aggression -- and Cablevision will be pressed by Frontier in Connecticut.
- The firm has raised its fair value estimate to $33/share from $16/share, though it says Cablevision shareholders could face significant losses if the deal somehow didn't go through. CVC closed at $33.12 today.
Cablevision Systems Corp. is a telecommunications and media company, which includes a full suite of advanced digital television, voice and high-speed Internet services, local media and programming properties. It operates through three reportable segments: Cable, Lightpath and Other. The Cable... More
Industry: CATV Systems
Country: United States
Other News & PR