Time Warner Cable CEO Rob Marcus said his company’s deal with Comcast fell apart in the past few days as the extent of resistance from regulators came into sharper focus.
Time Warner Cable CEO Rob Marcus said his company’s deal with Comcast fell apart in the past few days as the extent of resistance from regulators came into sharper focus. PHOTO: REUTERS
Time Warner Cable Inc. Chief Executive Rob Marcus said the company is focused on operating its business in the wake of its merger breakup with Comcast Corp., and could emerge as either a buyer or seller amid an expected industry consolidation.
Comcast and Time Warner Cable announced Friday that they are ending their bid for a $45.2 billion tie-up that would have united the nation’s two largest cable providers, creating a behemoth in pay-TV, broadband, and film and TV content.
In an interview, Mr. Marcus indicated that the deal came apart in the past few days as the extent of resistance from regulators at the Federal Communications Commission and Justice Department came into sharper focus.
“Suffice it to say that over the last couple of days it became clear that this deal was not going to be approved by the regulators, at which time Time Warner Cable and Comcast and we, me and [Comcast CEO Brian Roberts], concluded that it was in our mutual best interest to terminate the deal quickly,” he said.
Mr. Marcus wouldn’t comment on any possible deals Time Warner Cable might pursue, but said the company has the flexibility to make necessary moves. Charter Communications Inc., backed by cable pioneer John Malone, pursued a takeover of Time Warner Cable before Comcast entered with its bid, and could make another run at the company.
“What I’ve said repeatedly is that we are in the business of maximizing shareholder value, and we fully intend to fulfill that obligation,” Mr. Marcus said. “That could be achieved by running the business on a stand-alone basis, allocating capital smartly, managing our balance sheet or engaging in M&A as an acquirer or as a seller.”
Mr. Marcus declined to say what price Time Warner Cable would ask for in any approach from Charter, and declined to comment on whether TWC would exercise its right of first refusal to purchase Bright House Networks. Charter had struck a deal to acquire Bright House last month that was contingent on the Comcast-TWC transaction closing.
The landscape has shifted greatly since Time Warner Cable struck a deal to sell itself to Comcast last year, with new online video players entering the marketplace and traditional media companies dabbling in streaming TV. Mr. Marcus said that he is encouraging of the “over the top” online video landscape because it is the “killer app” to sell broadband subscriptions.
But he said he is “skeptical” of TWC getting into that business itself. “The idea of selling a video product that is not related to ownership and management of physical” infrastructure “doesn’t feel to me in a competitively advantaged position,” he said.
The demise of the Comcast merger means Mr. Marcus won't receive an $80 million exit package he was due if the deal were consummated and he departed.
Despited the failed Comcast deal, cable industry insiders still expect cable mergers to occur between the smaller players: Time Warner Cable, Charter, Cablevision Systems Corp., Bright House and Cox Communications.
“By this time next year, there will be some combination of some of those companies,” one top cable executive said.