×

Altice Chiefs Seek to Slash Cablevision Execs’ Fat Paychecks

Cablevision Systems’ new Euro-pinching French owners are looking to cut the fat at their latest American possession.

Altice executives called out high salaries among the “many layers” of management at the Bethpage, N.Y.-based cable operator, after the companies announced the $17.7 billion pact.

“I don’t like to pay salaries. I pay as little as I can,” said Altice founder Patrick Drahi, speaking Thursday at Goldman Sachs’ Communacopia conference in New York.

More than 300 Cablevision executives earn $300,000 or more per year, Altice CEO Dexter Goei noted, also at the Goldman confab. That, according to Drahi, will change.

Cablevision declined to comment on the Altice execs’ remarks.

Also at Communacopia, Drahi said he is looking to snap up more cable ops Stateside, and that Altice eventually hopes to acquire its way into the U.S. wireless sector.

Overall, Altice said it anticipates cutting some $900 million in operating costs annually by consolidating Cablevision and Suddenlink Communications, a smaller operator it bought for $9 billion earlier this year.

Cablevision has about $1.3 billion in annual employee expenses, according to estimates by Macquarie Securities analyst Amy Yong. Given that as of the end of 20014, the company had 13,656 full-time employees and another 800 part-timers, there’s “ample room for headcount reduction,” she wrote. A 20% cut to Cablevision’s workforce would lead to $260 million in savings, according to Yong, who added that Altice has an impressive track record of cost-cutting.

But Altice’s $900 million projected cost-synergies is an aggressive target, and may not fully appreciate the differences between the European and U.S. pay-TV biz, Morgan Stanley analyst Ben Swinburne wrote in a research note.

“There are structural reasons that U.S. cable margins are lower than European margins, including business mix, content costs and competitive intensity,” he said. Deep cuts, according to Swinburne, “could put (Cablevision’s) revenue growth at risk, which CVC already estimates at only 1%-1.5% per year.”

The future of Cablevision’s Newsday and News 12 local-news TV networks is unclear with the Altice deal. The money-losing divisions “will be difficult to move to profitability without shutting both down,” Swinburne opined.

Altice expects the Cablevision takeover to close in the first half of 2016, pending regulatory approvals.

Under the terms of the pact, Altice would pay Cablevision a $560 million breakup fee if the deal is terminated on its part, while Cablevision is on the hook to pay Altice $280 million if it calls off the deal.

As of the end of June, Cablevision had 2.64 million video customers (down 4.8% year over year) and 2.78 million broadband subs (unchanged from a year prior).

More TV

  • Jennifer Lopez

    Jennifer Lopez Joins TikTok App to Promote NBC's 'World of Dance'

    Jennifer Lopez is the latest celebrity to hop on TikTok, the short-form video app owned by Chinese internet giant Bytedance — more proof of the app’s growing traction, and reflective of media companies’ desire to reach its young-skewing base. Lopez had a very specific aim: to get fans excited about “World of Dance,” the NBC [...]

  • Jussie Smollett, Method Man, Danielle Brooks

    Jussie Smollett Episode of TNT's 'Drop The Mic' Pulled In Wake of Scandal

    TNT has pulled an upcoming episode of its hip-hop roast battle show “Drop the Mic” featuring “Empire” star Jussie Smollett. The episode, set to air March 6, was yanked following the arrest of Smollett on Thursday for allegedly staging a hate crime against himself. In the episode, Danielle Brooks, who plays Taystee on “Orange Is [...]

  • Reese Witherspoon Davita Scarlett

    Starz to Develop 'Kin' Series With Reese Witherspoon's Hello Sunshine

    Reese Witherspoon’s Hello Sunshine banner has inked a deal with Starz to develop “Kin,” Variety has learned. The multi-generational family drama comes from “Queen Sugar” and “Constantine” writer Davita Scarlett, who developed the project with Chester Jones III. Witherspoon and Hello Sunshine film and TV head Lauren Neustadter are on board as executive producers alongside [...]

  • David Shuster Michelle Makori I24

    Altice Aims to Carve Out Niche in Cable With Global-Themed i24News

    Who would invest in the U.S. launch of a linear, 24/7 cable news network in the current climate of bloodletting for niche cable channels? Patrick Drahi, the French-Israeli media mogul who controls Altice USA and Altice Europe, that’s who. Multiple system operator Altice USA is slowly but steadily expanding the cable distribution base for i24News, [...]

  • Sunday Night Football Ratings

    Pete Bevacqua Expands Oversight of NBC Sports

    Pete Bevacqua, who joined NBC Sports Group as president in September of last year, will gain more oversight of the NBCUniversal unit in the wake of a recent restructuring of the executive ranks of the corporation. Bevacqua retains his role as president, but will oversee the entire NBC Sports Group portfolio, adding NBC Olympics, production, [...]

  • 'Robin Hood' Director Otto Bathurst to

    Showtime's 'Halo' Series Enlists 'Robin Hood' Director Otto Bathurst

    Showtime’s adaptation of the wildly popular video game “Halo” has found its new director. The network has announced that Otto Bathurst will assume the director’s chair for multiple episodes, as well as serving as EP for the live-action series. Bathurst’s most recent directorial credits include last year’s adaption of “Robin Hood” with Taron Egerton and [...]

  • 'Haunting of Hill House' Renewed, Creators

    'Haunting of Hill House' Renewed as Anthology, Creators Ink Overall TV Deal at Netflix

    “The Haunting of Hill House” is returning to Netflix–sort of. The streaming giant has ordered a new installment in what they are calling “The Haunting” anthology, meaning the  next chapter of the horror series will feature an entirely new story and new characters from those seen in the first season. In addition, Netflix has entered [...]

More From Our Brands

Access exclusive content