Time Warner And Comcast Deal Falls Through
But as the cable industry continues to consolidate, don’t expect the nation’s two biggest cable and broadband providers to stop making deals together.
The Philly-based Comcast may start by buying up smaller companies with a focus on acquiring compelling content.
“They’ll probably avoid any U.S. acquisitions in cable distribution,” Mike McCormack, managing director of the investment bank Jefferies, told The Huffington Post on Friday. “It’ll probably be more on the content side than the cable plan.”
In 2014, the company gained a grip on in-home video streaming when they purchased two tech firms, PowerCloud Systems and Freewheel Media.
On Thursday, Fortune reported that Comcast recently held merger talks with Vox Media, the publisher of digital magazines Vox, The Verge and Polygon, but the deal fell apart last month. Still, Comcast Ventures remains one of Vox’s chief investors. Vox Media did not immediately respond to an email requesting a statementt on Friday morning.
In March, Comcast established a new $4.1 billion investment venture that could be used to gain an even stronger foothold in the digital media market.
Comcast may also look to invest in content companies abroad, McCormack said.
“They’ve got their eyes on the international side,” he said. “And on the international side, the interest is more in content because they don’t want to run a cable plan in another country.”
For Time Warner Cable, the main goal may still be to sell.
Before Comcast made its $45.2 billion offer to buy last year, Time Warner Cable was in talks to merge with Charter Communications, the country’s fourth-largest cable provider, but it was outbid by Comcast.
Last month, Liberty Media CEO Greg Maffei proclaimed there’d be a ton of reasons” for Charter to pursue Time Warner Cable if the Comcast deal crumbled. Considering Liberty is Charter’s dominant shareholder, that’s a strong endorsement.
“There’s a very high likelihood that there will be an acquisition by Charter,” McCormack told the Huffington Post.
Together, Charter and Time Warner Cable would have 15 million video customers and 16.5 million Internet subscribers, according to stats from the Associated Press. That’s still dwarfed by Comcast, which alone has 22.4 million video subscribers and 22 million Internet customers.