Charter CEO Rutledge: After Losing Time Warner Cable, We’re Still Interested in Acquiring Subscribers

Tom Rutledge Cablevision
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Charter Communications may have been blindsided by Comcast’s $45 billion bid last week for Time Warner Cable — topping Charter’s hostile takeover offer — but president and CEO Tom Rutledge said the operator continues to be interested in growing by acquiring customers in other deals.

“Notwithstanding everything that has happened, we are still interested in wisely acquiring subscribers,” Rutledge said on the operator’s fourth quarter 2013 earnings call Friday.

Asked on the call about what deals Charter may be evaluating, Rutledge said, “I don’t want to talk about specific opportunities,” adding that the main opportunity the company is looking at now are the 7 million homes passed by Charter that do not subscribe to its services.

Previously, Charter and Comcast had reportedly reached an agreement to divvy up Time Warner Cable markets in the event that Charter — together with John Malone’s Liberty Media, which holds a 27% stake in Charter — successfully completed its takeover of the larger MSO. Supposedly, Comcast would have taken TWC Cable’s NYC, North Carolina and New England cable assets from Charter.

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Charter is the third-biggest U.S. cable operator, and had hoped to scale up with the acquisition of Time Warner Cable, which is nearly three times as large. Instead, Comcast is poised to roll up TW Cable’s 11.2 million cable TV customers to get even bigger, with more than 30 million video subscribers across the U.S.

On the call, Rutledge reiterated that Charter’s pursuit of Time Warner Cable was not about trying to reduce programming costs, saying the combined company would have gained only minimal leverage in negotiating deals with TV networks.

Overall, Charter revenue grew 5% in the fourth quarter of 2013, to $2.15 billion, and the MSO posted net income of $39 million versus a loss of $79 million in the year-earlier quarter.

During Q4, Charter lost 2,000 consumer TV subscribers — versus a loss of 36,000 in the year-earlier period — while adding 93,000 residential Internet customers compared with 59,000 in Q4 2014.

As of the end of 2013, Charter had 4.18 million TV, 4.38 million broadband and 2.27 million phone subscribers. Residential customer relationships increased 3% for the year, to 5.56 million total. Those figures include subs served by the former Bresnan Broadband systems, which Charter bought from Cablevision last year for $1.6 billion. Bresnan had about 375,000 customers in Montana, Wyoming, Colorado and Utah, and Charter now reports customer data pro-forma as if the Bresnan transaction had occurred on Jan. 1, 2012.