Save Access

Note: In spite of increasing media consolidation, thankfully, there will be more 'competition' to 'lower prices'. It seems the cable and telco industry business offices are out of step with their PR offices. We wonder if any state legislators are paying attention . . .

from: NY Post

PARSONS: CABLE BIZ SHAKEOUT COMING
By PETER LAURIA

June 8, 2007 -- If there was any doubt that the motto for publicly traded cable companies is get big or get out, Time Warner CEO Richard Parsons erased it with his comments yesterday.

Speaking at a Merrill Lynch conference in London, Parsons said that as consolidation in the cable industry continues he expects Time Warner's stake in its cable unit to get smaller as its footprint gets bigger.

"Eventually, five years down the road, it's conceivable to me that because of the way that business grows . . . there could come a point in time when there's two separate stand-alone companies," Parsons said of a potential split of Time Warner from its cable division.

Translation: Time Warner expects its ownership of the cable unit to get diluted more and more as the division uses its stock to buy additional systems until eventually it and Comcast are the only two cable companies left trading on the public markets.

Just a few years ago there were upwards of eight publicly traded cable companies, but competition from satellite and telephone companies has resulted in a wave of acquisitions or companies being taken private.

Time Warner and Comcast teamed up to buy Adelphia Communications out of bankruptcy, while Cox and Insight were taken private. And Cablevision's founding Dolan family is currently trying to take that company private.

"Cable industry consolidation makes economic, financial, marketing and regulatory sense," said The Carmel Group's Jimmy Schaeffler.

Aside from Comcast and Time Warner Cable, only the much smaller Charter Communications and Mediacomm Communications remain on the public markets.

Industry observers expect those two companies to be acquired or taken private as competition intensifies.

Having only two publicly traded cable companies would bring the industry in line with its satellite and telephone competition.

Both those industries feature two dominant, publicly traded players - DirecTV and EchoStar in satellite television, and Verizon and AT&T in telecommunications.