You will be redirected back to your article in seconds

Verizon Exploring Potential Charter Merger (Report)

Verizon is looking at scenarios for merging with cable giant Charter Communications, the Wall Street Journal reported — which, if such a multibillion-dollar blockbuster deal happened, would continue the wave of consolidation in the telecom and pay-TV sector.

Verizon chief Lowell McAdam made a “preliminary” overture to “officials close to Charter,” and the telco has enlisted advisers to study a possible merger, according to the Journal report, which cited anonymous sources.

Bloomberg later reported that McAdam met with Greg Maffei, CEO of Liberty Media — which owns a stake in Charter — to discuss a potential deal for the cable operator. Verizon has mulled more than 10 other potential targets, per Bloomberg’s sources, including large media companies, telecom providers and cable operators. There currently are no “significant” talks between Verizon and Charter, according to CNBC.

Verizon and Charter reps declined to comment on the reports. Charter shares were up more than 7% in trading Thursday morning on the report, while Verizon’s stock was down 1.6%.

With the backing of billionaire John Malone’s Liberty Media, Charter last year completed its takeover of Time Warner Cable, after Comcast’s attempt to buy TWC failed in the wake of regulatory opposition, giving it a presence in major markets like New York and L.A. Charter at the same time acquired Bright House Networks and is now the No. 2 cable operator behind Comcast.

For Verizon, the urge to merge comes as growth in its wireless sector has been slowing — and coupling with Charter would give the telco a much bigger footprint to gain economies of scale. Verizon would be able to tap into Charter’s backbone networks for wireless data backhaul, and a combined Verizon-Charter would have more leverage in negotiating programming deals with TV programmers.

Meanwhile, AT&T in 2015 acquired DirecTV, making the combined company the No. 1 U.S. pay-TV provider, and the telco is trying to swallow Time Warner in an $85 billion deal pending regulatory review.

Word that Verizon is potentially sniffing around Charter comes as Verizon’s $4.8 billion bid for Yahoo’s operating businesses remains in limbo following the internet company’s disclosure of two massive user-info breaches. Verizon said in its fourth-quarter earnings announcement Tuesday that it “continues to work with Yahoo to assess the impact of data breaches”; Yahoo this week said it expects the deal with Verizon to close in the second quarter of 2017.

Any kind of Verizon-Charter tie-up would face close regulatory review. The Trump administration is viewed as more laissez-faire than Obama’s, but even given President Trump’s business-friendly bias it would likely be a hard sell, since combining Verizon and Charter would eliminate a competitor for broadband, TV and phone service in many areas. But “while there is no guarantee on anything coming out of D.C., we do think such a combination would pass regulatory review,” Wells Fargo analyst Marci Ryvicker wrote in a research note. “It wouldn’t necessarily be easy but it should go through.”

Charter (combined with TW Cable) had 16.9 million residential video customers and 21 million broadband subs as of last September, while Verizon had 4.7 million Fios TV and 7 million high-speed internet subs at the end of 2016. For Q4, Verizon added a net 591,000 postpaid wireless connections (versus 1.5 million a year earlier) to stand at 108.8 million postpaid wireless retail customers.

More Biz

  • Everybody Changes

    New Cadence Productions Acquires Domestic Rights to Panama's 'Everybody Changes'

    New Cadence Productions has acquired North American rights to the transgender family drama “Everybody Changes,” Panama’s official selection for the 92nd annual Academy Awards. The movie from writer-director Arturo Montenegro tells the true story of a Panamanian couple with three children who grapple with the father’s decision to come out as a transgender woman. “Everybody [...]

  • Assistant Attorney General, Antitrust Division nominee

    Justice Department Moves to End Paramount Antitrust Decrees

    The Department of Justice will seek to end the Paramount consent decrees, the landmark agreements that have barred studios from owning theaters for the last 70 years. Makan Delrahim, the head of the department’s antitrust division, made the announcement Monday in a speech to the American Bar Association fall forum on antitrust. He argued that [...]

  • Viacom HQ LA

    ViacomCBS Sets HR and Inclusion Chiefs

    ViacomCBS has named corporate heads of HR and inclusion as the companies prepare for the merger that is set to close early next month. The soon-to-combine Viacom and CBS have tapped Nielsen alum Nancy Phillips to serve as exec VP and chief people officer. Viacom alum Marva Smalls will serve as global head of inclusion, [...]

  • Sony Pictures Studio Culver City

    Sony Pictures Entertainment Buys AT&T's Stake in Game Show Network

    Sony Pictures Entertainment has bought out AT&T’s minority interest in Game Show Network for about $500 million. The deal makes Sony the sole owner of GSN. AT&T had owned 42% of the company, which the telco giant inherited with its purchase of DirecTV in 2015. AT&T has been on a mission this year to pay [...]

  • John Malone

    John Malone Boosts Stake in Discovery With $75 Million Stock Purchase

    John Malone has upped his stake in Discovery Inc. by purchasing $75 million worth of stock on the open market. Malone picked up just under 2.7 million shares in Discovery at $28.03 on Nov. 14, according to a Securities and Exchange Commission filing. Malone was already the company’s single-largest individual shareholder who holds super-voting shares [...]

More From Our Brands

Access exclusive content