Comcast on Friday morning announced that it has terminated its agreement to acquire Time Warner Cable, with Comcast Chair & CEO Brian Roberts appearing on CNBC to discuss the failed deal. Roberts said, “We wanted to bring the products that we've got that we're very proud of to new markets, but it's not going to happen. So we reached that conclusion. We always structured this deal in a way that would allow us to walk away if it looked like it wasn't going to happen and that's where we are at.” CNBC’s Joe Kernen called the deal “wrong-minded and overreached.” Roberts said Comcast “thought we could get the deal approved, we thought we could make a good case … but in the end, we’ve got to move on.” Roberts: “This situation was an opportunity that we felt was definitely worth trying for. You can't do things if you don't try.” Roberts added, “We truly believed that we had many public interest benefits from putting the two companies together ... and one of the things that I think will be a by-product of this is all the energy, all the planning, we did a top-to-bottom review of every operating policy in the company so that we’d be ready to implement them in a new company. We’ve learned a lot and we’re a better company for it” (“Squawk Box,” CNBC, 4/24). TWC Chair & CEO Robert Marcus on Friday said that the company "could be a buyer or seller in any future deals." Marcus: “Suffice it to say that over the last couple of days it became clear that this deal was not going to be approved by the regulators" (WSJ.com, 4/24).
THINGS FALL APART: In N.Y., Emily Steel writes the deal "would have brought together the country’s two largest cable operators at a time when the Internet acts as the ultimate gateway for information and entertainment, and when vast technology changes revolutionize how people watch and pay for television." The Justice Department "confirmed that it had significant concerns that the proposed merger 'would make Comcast an unavoidable gatekeeper for Internet-based services that rely on a broadband connection to reach consumers.'" Attorney General Eric Holder in a statement said, “This is a victory not only for the Department of Justice, but also for providers of content and streaming services who work to bring innovative products to consumers.” FCC Chair Tom Wheeler on Friday said that the decision to abandon the deal "was in the best interest of consumers" (NYTIMES.com, 4/24). The WALL STREET JOURNAL's Shalini Ramachandran in a front-page piece writes the acquisition had "promised to reshape the media landscape -- forcing TV channel-owners and other pay TV operators to contemplate their own mergers." Regulators "worried about the power Comcast would amass through" the TWC deal, with "roughly 30% of the U.S. pay-TV market and 57% of the broadband market." Meanwhile, Comcast "could be in a position to do another major deal to seek out further growth" (WALL STREET JOURNAL, 4/24). In N.Y., Claire Atkinson reports Comcast’s "refusal to spin off part of its media and cable empire turned out to be a deal-killer." Sources said the FCC was "intent on Comcast saying goodbye to either NBCU or its smart-TV operating system, X1, in order to win approval" for the deal (N.Y. POST, 4/24). Also in N.Y., Jonathan Mahler writes under the header, "Once Comcast's Deal Shifted To A Focus On Broadband, Its Ambitions Were Sunk" (N.Y. TIMES, 4/24).
BLACK EYE FOR COMCAST? The WALL STREET JOURNAL's Joe Flint writes the deal has "become the biggest black mark" on Roberts' "record as a media mogul, surpassing Comcast’s ill-fated" $48.7B takeover attempt of Disney in '04. The "biggest question" going forward is whether Roberts will "try to play deal maker again." Comcast was "made out to be the poster child for bad customer relations" during its pursuit of TWC. None of these "big fumbles fit with the image" Roberts "works so hard to protect -- that Comcast is a humble company with family roots and strong values" (WALL STREET JOURNAL, 4/24). In N.Y., Steel, Gelles, Ruiz & Lipton in a front-page piece write the failed acquisition of TWC "is also a setback" for Comcast Exec VP David Cohen, who was "in charge of steering deals past regulators." Cohen is a "well-connected lobbyist known for his influence" in DC. But one of the "biggest concerns" for the Justice Department was that Comcast "could use its clout to place restraints" on networks. For example, it could "pressure networks not [to] sell their content through stand-alone Internet streaming services, like those offered by HBO and CBS, that let consumers watch programming without paying for a traditional cable subscription" (N.Y. TIMES, 4/24). USA TODAY's Roger Yu in a front-page piece writes it could be a "huge blow" to Comcast, which had "bet on the deal to gain customers in key markets" like N.Y. and L.A. (USA TODAY, 4/24). REH Advisors Principal Reed Hundt said, "It was very, very predictable that the deal would be in jeopardy from the beginning and I don't think there was any way that Comcast could have saved it” (“Squawk Box,” CNBC, 4/24).
ROUND AND ROUND IT GOES: Comcast walking away "will raise the prospect of another suitor going after" TWC. Sources said that Charter Communications, which pursued TWC "before it was snapped up by Comcast, remains interested in the company" (WALL STREET JOURNAL, 4/24). Research firm MoffettNathanson partner Craig Moffett said, "The pace of cable consolidation is likely to accelerate rather than decelerate. It’ll just be Charter rather than Comcast leading the charge" (BLOOMBERG NEWS, 4/24). CABLEFAX DAILY writes, "If you're AT&T and DirecTV, it might be time to buckle up" (CABLEFAX DAILY, 4/24). The N.Y. POST's Atkinson notes investors on Thursday "pushed up shares of Cablevision on the expectation" that TWC will "size up the rival cable outfit. TWC also "could go after" Charter "or vice versa." Meanwhile, Charter's deal for Bright House Networks, which "outsources most of its operations" to TWC, "is now off the table" (N.Y. POST, 4/24). BTIG Media & Technology Analyst Rich Greenfield said, “I think the big question that we're all going to be focusing on is if they're not buying Time Warner Cable -- the Roberts family really has had an insatiable appetite for deals historically -- what are they going to turn their attention to now? They're not just going to sit around” (“Squawk Box,” CNBC, 4/24).
 |
Dodgers fans bracing for the SportsNet LA
impasse to continue for another season |
WHAT ABOUT DEM BUMS? In L.A., Bill Shaikin writes Dodgers fans "should brace for a second full season without the home team on television throughout Southern California" following the Comcast-TWC fallout. For more than a year, Dodgers execs have said that the TV impasse with SportsNet LA "would be resolved soon after government regulators approved the Comcast-TWC merger." But SportsCorp President Marc Ganis said that TWC should "swallow part of the contract and move on." Ganis: "Time Warner simply did a stupid deal. At some point, they’re going to have to bite the bullet, and it might as well be sooner rather than later so Dodger fans can watch the games" (L.A. TIMES, 4/24). LHB Sports, Entertainment & Media President & CEO Lee Berke said this is "not something Dodgers fans want to hear." BHV Media co-Founder & CEO Chris Bevilacqua: "Unfortunately, it's back to the drawing board." In California, Michael Lev asks what hope Dodgers fans "have of the impasse ending." One "possibility is AT&T’s proposed takeover of DirecTV." DirecTV is "considered the biggest distribution domino." However, that deal "could face obstacles similar to the ones Comcast encountered." Additionally, brokering a deal for SportsNet LA "might not be at the top of the priority list for the two companies." Bevilacqua: “They’re going to be dealing with a lot of other global issues. I don’t see a quick fix there either" (ORANGE COUNTY REGISTER, 4/24).
