Comcast-Time Warner Cable: What it may mean for other media deals

L.A. Times consumer columnist David Lazarus gives his take on what Comcast’s $45-billion purchase of Time Warner Cable will probably mean for consumers.


Comcast’s blockbuster deal to buy Time Warner Cable has ignited speculation among Wall Street analysts about further consolidation in the media industry.

Investors have long anticipated merger agreements between Dish and DirecTV on the satellite side, as well as Sprint and T-Mobile on the wireless service provider side, and are now pondering what’s next. The deal also raises questions about future moves by Cox Communications and the jilted Charter Communications, which was in the process of its own takeover attempt of Time Warner Cable.

The proposed $45-billion transaction between Comcast and Time Warner Cable will bring great scrutiny from regulators and industry watchdogs and may actually put the brakes on future deal-making, according to veteran analyst Craig Moffett.


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“One media consolidation deal poisons the well for the next, not the other way around,” Moffett wrote in a research report for clients.

Pending likely government approval, Comcast would extend its lead as the biggest cable company, with 30 million subscribers and coverage in 19 of the top 20 markets, thus inspiring opponents to argue against putting one Goliath in charge of so much of the content heard by Americans.

If DirecTV and Dish Network agreed to mesh after the Comcast transaction, two-thirds of U.S. pay TV customers would align with just two firms, potentially making the opposition’s argument even stronger. “If the diversity of voices argument could be problematic for Comcast-TWC, it could therefore be fatal for a subsequent DirecTV-Dish Network attempt,” Moffett said.

The deal leaves Cox and Charter on the sidelines. Charter now has nowhere to turn for a big acquisition. Cox is close in size to Charter, and other cable operators are smaller still, Moffett notes, and therefore not very attractive.

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Shares of Charter Communications Inc. were down 6% to about $129 late in the stock market’s regular trading session Thursday.

BTIG analyst Walter Piecyk agreed that DirecTV is unlikely to make a move after the Comcast announcement. But he said the deal could encourage Masayoshi Son, head of Japan’s SoftBank Corp., in his pursuit of T-Mobile.

SoftBank bought a controlling stake in Sprint last year, and Son has since been making the case for a deal between Sprint Corp. and T-Mobile. Piecyk said Comcast launched its bid despite likely discouragement from regulators, and that could “embolden” Son to do the same.

Sprint’s stock rose about 5% to $8.49 late in regular trading, while shares of Dish Network and DirecTV were up slightly.

Time Warner Cable was up 7% to about $144 a share, while Comcast fell 4% to about $53 a share.



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