Media Mergers on the Hotplate

In a media and entertainment mega deal,cable TV titan Charter Communications,guided and backed by billionaire investor and Liberty Media magnate John Malone,is buying Time Warner Cable for 78.7 billion dollars in cash and stock,while at the same time putting fellow provider Bright House Networks in its shopping cart for 10.4 billion.From our perspective,said Troy Gayeski of Skybridge Capital,this deal is a great vindication of the strategy.Most of these deals are still accretive,which is a good sign there will be more deals.The US had a long hiatus in deal activity,but by late 2013,we started to see the boom come back.Europe is still grappling with slow growth,but now management teams are seeing deals are being rewarded.You're going to see inter-European consolidation.Italy has relaxed bank consolidation rules.The trend will be for higher deal flow,whether inter-European or with overseas partners.*
Also in the media and entertainment sector,Europe's Altice SA,based in Luxembourg,having just acquired American cable operator Suddenlink,is believed to be shopping for still more cable assets,a potential candidate being Bethpage,New York's Cablevision Systems Corporation.Charter rival Comcast has itself recently tried yet failed to acquire Time Warner Cable,being rebuffed by antitrust regulators.Some fear the lessened number of competitors will mean higher prices for customers.*
The expanded version of Charter would reportedly be called "New Charter." It would have a combined 24 million customers,serving about 18 million of those broadband Internet customers on 25 Mbps or less,and 16 million video subscribers,or about 17% of all video subscribers.New Charter would own about 86% of Bright House Networks;Advance/Newhouse will own the rest.Charter Communications' CEO Tom Rutledge would stay in that role for the new company.
All three of the prospectively merged companies offer Digital TV,High Speed Internet and Home Phone services.Time Warner Cable additionally brings assets in the form of cable advertising,regional sports networks,plus local news channels by way of Time Warner Cable News.TWC is the fifth largest landline telephone provider as well.It serves the big markets of Los Angeles,San Diego,New York City,Dallas,Charlotte,Cleveland and Cincinatti,among others.Indeed,TWC is larger than its acquirer Charter Communications.
New Charter would be the second largest cable TV company,after Comcast,and the third largest subscription TV provider,after AT&T/Direct TV and Comcast,pending regulatory approval of the AT&T/Direct TV merger.*
Time Warner Cable Inc (TWC),Bright House Networks Inc (BHN),Charter Communications Inc (CHTR),SPDR S&P 500 ETF (SPY),Liberty Media Corp (LMCA),Cablevision Systems Corp (CVC)

Private Equity and Traditional Media

Jeff Marcus,partner and co-founder of Crestview Partners,a private equity firm with expertise in media,said that 92% of Americans still listen to traditional radio,and 100 million homes subscribe to cable or satellite.That's where the channels that people want to watch are.Cable has the bandwidth.
There isn't a la carte cable because programmers insist on bundling.It's a contractual matter for the cable companies.
We specialise in difficult situations;contrarian situations;complexity.Hopefully we'll always be there to take advantage of that.We like a good business model,but with too much debt.
There are dislocations caused by new media that cause value to go down,but radio's a local business.People listen to radio in the car more than to any of the others;and most people do traffic and weather,which are not on new media.We believe in traditional media,Mr.Marcus emphasised.
Crestview Partners says it is a value-added private equity firm with about four billion dollars under management.It targets investments in financial services;media;health care;and energy.Among Crestview's holdings are Charter Communications;FBR Financial Corporation;Cumulus Communications;Silver Creek Resources;and Symbion Helathcare.