Comcast and Time Warner May Throw Charter a Bone, or 3 Million
Comcast Corp. (NASDAQ:CMCSA) and Time Warner Cable Inc. (NYSE:TWC) are in talks to discuss the possibility of divesting 3-5 million subscribers worth about $20 billion to competitor Charter Communications Inc. (NASDAQ:CHTR) as part of an effort to alleviate the concerns of government antitrust agencies, which must approve Comcast and Time Warner’s proposed merger.
Sources who spoke with NBC and Reuters say that the talks are in the very early stages and no decisions have been made yet. Reuters added that other cable companies are also interested in Comcast’s subscribers.
The three companies are considering either pursuing a straight-up sale of those 3 million subscribers, or creating an entirely new company with which to spin off those subscribers. Time Warner and Comcast would then give Charter a minority stake in the resulting company. The companies have also considered a combination of both options.
Analysts say that it’s likely that Comcast will end up offering Charter more than 3 million subscribers. “Once you offer something up, you only offer more up; you don’t offer less up,” said Amy Young, an industry analyst at Macquarie who spoke with FierceCable. Sources who spoke with Reuters, however, said that the it is “unlikely” that Comcast would offer 5 million subscribers.