Comcast’s deal for Time Warner Cable left Charter out in the cold
Comcast Corp. may seem like a white knight to Time Warner Cable, but the folks at Charter Communications probably consider it more of a snake in the grass.
Charter, which last month made an unsolicited bid for Time Warner Cable, had been talking with Comcast Corp. about joining its efforts, people close to both companies confirm. Charter even offered to sell Comcast some of Time Warner Cable’s East Coast properties, including a valuable system serving New York City.
Although Time Warner Cable rejected Charter’s bid, it was still making a push. Earlier this week Charter even unveiled a slate of directors it wanted to nominate to Time Warner Cable’s board in anticipation of a proxy fight for control of the company.
Charter was also still hoping to have Comcast join its efforts.
But Comcast was talking separately to Time Warner Cable even as it entertained discussions with Charter. When the talks with Charter fell apart over the structure of their partnership, Comcast and Time Warner Cable then put their negotiations into fifth gear.
As the deal was near the finish line, Comcast Chief Executive Brian Roberts rushed back from the Winter Olympics in Sochi, Russia, which NBC is airing. Roberts and the Comcast team huddled with Time Warner Cable in New York City and finalized a deal Wednesday night.
While Charter and Comcast never signed an agreement to team up on Time Warner Cable, Charter feels betrayed, an insider there said on condition of anonymity because of the sensitivity of the matter.
Charter shouldn’t have been surprised, one person familiar with Comcast’s thinking said, also speaking on condition of anonymity because of matter’s sensitivity. Comcast had made clear to Charter that it was prepared to do the deal itself.
Followers of Comcast and Roberts were not surprised by the move to undercut Charter.
“Behind that bland, competent exterior lies a man who doesn’t care how much blood there is on the floor,” said Susan D. Crawford, a visiting professor at Harvard and author of “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.” “It’s not evil,” she added, “he’s doing it in the service of shareholders.”
It’s now back to the drawing board for Charter. Last year, Liberty Media, the media company controlled by cable mogul John Malone, bought a stake in Charter and started pushing for more consolidation in the industry.
“Charter now lacks a large dance partner,” said Craig Moffett, an analyst with MoffettNathanson, a telecommunications research company.
For Malone and Roberts, this is the latest chapter in their long history.
The two first crossed swords more than two decades ago. At that time, both Liberty and Comcast were shareholders in Turner Broadcasting, the parent of CNN, TNT, TBS and Cartoon Network. When Time Warner, which was also a shareholder, made a move to buy the entire company, there was tension because Comcast felt Liberty got a better deal to sell its stake. Roberts complained at the time that Liberty was getting “preferential treatment.”
A couple years later, it was Malone who got mad at Roberts. When Tele-Communications Inc. founder Bob Magness died in 1996, Roberts made a covert attempt to buy his shares, which would have given him control of the company. Malone, who was chief executive of TCI at the time, beat back the effort, but was outraged at the brashness of Roberts.
Follow Joe Flint on Twitter @JBFlint.
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