Somebody buy somebody already!

Thu, 09/10/2009 - 10:55am
Brian Santo

Ever since the D.C. Court of Appeals killed the notion of ownership caps, people have been speculating about cash-rich Comcast buying another cable company. Some are openly agitating for it, in fact. That, in turn, is giving rise to speculation of counter-maneuvers by rivals.

With Comcast COO Steve Burke talking at the Media, Communications and Entertainment Conference by Bank of America Merrill Lynch, and Time Warner Cable chairman Glenn Britt speaking on a Web call with investors, media outlets have been able to elicit responses from the two of them from which one can construct an almost coherent narrative.

The result? Don’t hold your breath, but the issue is not going away either.

Let’s start with Citigroup analyst Jason Bazinet, who has proposed a cable industry mega-deal: He suggests Comcast should buy Time Warner Cable. Bazinet was quoted in this blog at Barrons.

Yeah, right. Maybe out of spite, but there are other, more likely targets – for example, just about anybody else.

Comcast’s Burke poured some cold water on the notion that Comcast is even looking to buy. “I don't think we wake up every morning saying, ‘How do we get bigger in cable?’” several outlets quoted him saying at the Media, Communications and Entertainment Conference.

But never say “never,” eh?

Burke was also quoted saying, “If there is a way to acquire cable systems for what we consider to be a good price, ones that are contiguous or well managed, we would certainly look at whatever was out there.”

Meanwhile, The Wall Street Journal’s MarketWatch site got to TWC’s Britt, who said that he expects the FCC would set some pretty high hurdles for any blockbuster consolidation in the cable industry.

In other words, if Comcast tried to buy TWC, even TWC would complain to the feds.

Meanwhile, what of the competition? DirecTV is reorganizing (again). Meanwhile, AT&T is fighting on multiple fronts. Wouldn’t it make AT&T’s life easier if it just bought its DBS partner? The idea, the WSJ explained, is that AT&T, currently overwhelmed by the bandwidth appetite of its iPhone customers, can then focus its resources on its 3G network and the migration to 4G.

I don’t know. Can even mega-corporations like AT&T afford to spend hundreds of billions of dollars on a stalling tactic?

But that’s not the point, is it? Wall Street makes money with mega-mergers.

And not that Burke or Britt or Randall Stephenson or John Malone need advice from me, but after events of the last few years, I personally am so disgusted by the Masters of the Universe over there on Wall Street I would welcome anything that frustrates them.

Is there room for consolidation among service providers? Most definitely. But there’s no compelling reason to rush until, as Burke says, it makes perfect sense to make a deal.



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