Comcast is buying Time Warner Cable

Posted on Thursday, February 13th 2014 at 9:38 a.m.

Comcast, which is already #1 in terms of market share, is going to be even bigger now that they are set to acquire Time Warner Cable for $45.2 billion in a stock-for-stock transaction. This will give Comcast a foothold into the New York market and many other markets that they haven’t had their tentacles in yet. Comcast was competing with Charter to buy Time Warner, but Charter was not providing a good enough offer to purchase Time Warner. Comcast will pay $158.82 per share, which is roughly what Time Warner Cable wanted Charter to provide (Charter offered $132.50 per share in a cash and stock deal). Comcast already bought NBC Universal in 2013 for $17 billion, so they are well on their way to becoming a media monopoly. Fun fact, Comcast also owns all of Universal Studios (the theme park) because of that deal and they even tried to buy the Disney company in 2004 for $54 billion in a hostile takeover. Disney, smartly, declined the offer.

The FCC and the Department of Justice still has to approve the Time Warner acquisition.

Will this be good for consumers? We’ll see… I think it will be good for the most part because Comcast will be so large that they will be able to get more channels and better pricing/value due to its immense power. It’s kind of like Walmart. They keep the prices low for the consumer because they hold such an immense power in the retail space. Suppliers/media producers will not be happy now as they will be feeling quite the pinch because of Comcast’s after-acquisition market size which is estimated to be ~30% of the U.S. pay television video market.

I don’t think Comcast’s customer support will get much better but time will tell if the normal everyday consumer will benefit from this acquisition. Anything would be an improvement to be honest so we’ll see how it goes.

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