Dec. 6, 2013, 11:10 AM
Dec. 6, 2013, 7:17 AM
- Some of the buzz over Time Warner Cable's (TWC) reported willingness to take an offer in $150 to $160 range from a buyer such as Charter, Comcast, or Cox comes from incoming CEO Rob Marcus.
- "I am the perfect guy to manage the M&A component out there," says the exec who will replace Glenn Britt at the helm of TWC on January 1. Many media analysts discount a deal getting pulled off at that level.
- Related: A Comcast-TWC merger faces regulatory hurdles.
- Shares of TWC gave back nearly all their merger-fueled gains in late trading yesterday.
Dec. 6, 2013, 2:44 AM
- The Obama administration probably wouldn't authorize any attempt by Comcast (CMCSA) to acquire Time Warner Cable (TWC), FCC Republican commissioner Ajit Pai has told the WSJ.
- Precedents such as the government's blocking of AT&T's purchase of T-Mobile US suggest a Comcast-TWC deal "could face a number of hurdles in the Obama administration," Pai said. "A Republican administration likely would be more inclined to approve a deal."
- TWC has already turned down two bids from Charter Communications (CHTR), the WSJ reports, adding that Comcast and Charter are unlikely to make a joint offer.
- While the interest in TWC has sent the telecom carrier's shares soaring, it has also hurt its bonds, due to fears about a debt overhang that a deal could bring. The price of TWC's 30-year bond that matures in 2042 has tumbled 17% since the merger chatter began.
Dec. 5, 2013, 3:55 PM| Dec. 5, 2013, 3:55 PM | 7 Comments
Dec. 5, 2013, 9:04 AM
Dec. 4, 2013, 5:23 PM
- The economic argument is lopsided against the Pay-TV industry (CHTR, CVC, TWC, DISH, DTV) moving to an a la carte system, reasons Needham.
- The investment firm has some staggering estimates which indicate consumers could end up paying significantly more for an unbundled system or see a large number of networks close up shop to limit their choices.
- Working backwards, 180 channels at an average annual programming cost of $280M per year requires a bundled system to create the ad and subscriber revenue to support it.
- Though the math might work out fine and dandy, subscriber losses and a younger generation unfazed by cord-cutting indicates something might need to give.
- The wildcard in the mix: Online TV initiatives from Sony, Google, and Intel as well as the evolution of Netflix (NFLX) will also play a factor.
- Related stocks: CBS, DIS, AMCX, TWX, CMCSA, FOXA, SNI, MSG, DISCA
Dec. 4, 2013, 3:55 PM
- Deutsche Bank weighs in on the chase for Time Warner Cable (TWC -1.4%) that has lit a fuse under the entire sector.
- The investment firm thinks only one bidder will emerge - Charter (CHTR +0.1%) with help from Cox or Comcast (CMCSA +0.2%) - but at a deal price lower than $140 per TWC share.
- Previous comments from Liberty Media (LMCA -1.6%) on a "merger of equals" also limits the premium a Liberty-backed bid would pay, notes Deutsche.
Dec. 4, 2013, 9:52 AM
- Higher spending on programming by network owners is paying off immediately in the form of increased revenue from content, according to media analysts.
- The most recent round of reports from Time Warner (TWX -0.4%), CBS (CBS +0.4%), Viacom (VIAB -0.4%), and 21st Century Fox (FOXA -0.8%) show higher program costs were offset by licensing and advertising revenue. Even big sports rights deals from Disney (DIS -0.7%) and NBC (CMCSA) appear to be adding enough profits to justify the steep costs.
- What to watch: A breaking point on programming costs could be seen in the future with the Pay-TV industry (DISH, DTV, CHTR, CVC, TWC) dabbling with smaller bundles for consumers.
- Related ETF: PBS.
Dec. 3, 2013, 8:55 AM
- Charter Communications (CHTR) CEO Thomas Rutledge says the company doesn't need to buy Time Warner Cable (TWC) in order to grow its business.
- During an exchange on CNBC with Liberty Media's (LMCA) Greg Maffei sitting in, Rutledge called the run for TWC a "rather frothy" experience with both Cox Communications and Comcast (CMCSA) in the mix.
- Maffei, for his part, said TWC isn't the only cable player out there that would make an attractive fit for Charter.
Dec. 2, 2013, 2:58 PM
- Time Warner Cable (TWC -0.4%) has introduced a "Starter TV with HBO" bundle for $30 a month in a move that could resonate across the Pay-TV industry. The package includes only 20 channels, but customers can expect a fair amount of upselling pressure.
- Comcast (CMCSA -0.7%) started the light bundle trend last month with a similar package.
- What to watch: DirecTV (DTV +1.5%) and Dish Network (DISH +0.1%) as direct competitors with TWC for subscribers could feel the most pressure in the industry to come out with a smaller bundle.
Dec. 2, 2013, 8:19 AM
- A massive deal by Rogers Communications (RCI) to buy the rights to broadcast NHL hockey in Canada is tied to preventing cord-cutting, according to industry watchers.
- Analysts call the move by the company a "reasonably priced" insurance policy against long-term cash flow erosion.
- In the U.S., ESPN's NFL and college football packages have helped prop up carriage fees for Disney (DIS) - but haven't stemmed subscriber losses for Pay-TV operator's (CHTR, TWC, CVC, DISH, DTV).
- Still, live sports programming is seen as critical to keeping the bundled network model in place for the industry and future sports rights bidding could go sky-high.
- Previous on cord-cutting: Subscriber losses in the U.S.
Nov. 29, 2013, 8:26 AM
- Time Warner Cable (TWC) faces an uphill battle to convince Pay-TV operators to pay the hefty carriage fees for the company's regional SportsNet L.A. network which includes L.A. Dodgers baseball.
- The cable operator is expected to ask for $5 a month for each TWC subscriber, a fee that reportedly jumps to $8 within five years. Negotiations are reportedly going very slowly as cable/satellite players balk at the high rate for a new unproven network.
- What to watch: TWC has only a couple of months before the Dodgers break into spring training with no deals in place yet for AT&T’s U-verse, Charter Communications, Cox Communications, DirecTV, and Verizon FiOS.
Nov. 27, 2013, 3:46 PM
Nov. 26, 2013, 3:32 PM
- A report on a potential bid by Cox Communications to buy Time Warner Cable (TWC +3%) has brought more buyers into the Pay-TV sector again.
- The WSJ says its sources indicate a final decision by Cox hasn't been made yet. The chase could be rather interesting with several joint and single bidders now in the mix.
- Cablevision (CVC +3.7%), Charter Communications (CHTR +1.1%), Dish Network (DISH +3.2%), and DirecTV (DTV +1.6%) are all higher for the day on the ongoing merger chatter - while Comcast (CMCSA +0.1%) is level with its bid seen as slightly more problematic and the company unreachable as an acquisition.
- Sector-related: No denying impact of cord-cutting.
Nov. 26, 2013, 3:14 PM
Nov. 26, 2013, 1:16 PM
- Over the last three calendar years an estimated 5M cable and broadband subscribers have been lost as the Pay-TV sector continues to feel the impact of cord-cutting and the coming of age of cord-nevers.
- The consumer shift toward viewing content on the Internet and mobile devices is so well-entrenched that the industry could dip below the 40M subscriber mark for the first time in over five years. A major surprise is that the viewing slump also include major sporting events which were once considered the lynchpin strategy to prevent the cord-cutting phenomenon. (BI chart)
- The recent surge in cable/media stocks is a result of the industry deciding it won't just sit on its hands amid stalled growth and will be open to consolidation.
- Previous: Putting a number to cord-cutting.
- Related stocks: CHTR, CVC, TWC, CMCSA, DISH, DTV.
- Related ETFs: PBS.
TWC vs. ETF Alternatives
Time Warner Cable Inc provides video, high-speed data and voice services. The Company also offers security and home management services, networking and transport services and enterprise-class, cloud-enabled hosting, managed applications and services.
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