Finance

Drahi: Cablevision Buy Was a Good Move

Altice chief says potential for U.S. cable is bigger than he imagined 5/23/2017 5:41 PM Eastern

Bethpage, N.Y. – Shortly after rallying the troops as part of a worldwide rebranding effort, Altice chairman Patrick Drahi told reporters that he was pleased with his company’s purchase of the former Cablevision Systems, and hinted at future moves to come.

Drahi was at Altice USA headquarters here with top executives at the firm as they announced a new logo and tagline “Together Has No Limits.” In addition to speeches by Altice USA chairman and CEO Dexter Goei and Altice CEO Michel Combes, the company beamed presentations by executives in Israel, France, Portugal and the Dominican Republic to its locations worldwide via satellite.

After the presentations, Drahi held court with several reporters representing all the company’s markets.

The U.S. is Altice’s newest market – it purchased Cablevision in June and Suddenlink Communications in December 2015 – and Drahi remembered the criticism he endured especially for the Cablevision purchase, which at $17.7 billion, many analysts believed was too costly.

“I like to prove to the outside world that I am right,” Drahi said of the Cablevision purchase. “When we announced the Cablevision purchase, Altice [stock] crashed. The results we have had and the potential we have are bigger than I thought. Everything we expected when we bought the company has been delivered. And I see more.”

Altice had originally said it would take about $900 million in costs out of the business over several years, a goal many analysts saw as overly ambitious. Recently the company said it had achieved about half of that goal in December.

Over the course of two days executives walked reporters through several of the company’s U.S. businesses, pointing to opportunities in advanced advertising through its cable systems and data analytics firms like Teads and Audience Partners, potential expansion of its hyper-local news channels News 12 Networks and its international news network i24, and its plan to build a state of the art fiber-to-the-home network via its project “Generation Gigaspeed.”

While Optimum has lost about 60,000 video customers between March 31, 2016 and March 31, 2017, it has added about 56,000 broadband subscribers.  At the same time revenue has increased about 6.8% from $1.44 billion to $1.55 billion and cash flow has increased 35% from $441.3 million to $596.8 million. And the company intends to commit “billions of dollars” to building out its fiber network over a period of years, Goei said.

While the initial public offering for its Altice USA business awaits approval, Drahi said he continues to look for intriguing assets. While he would not identify any specific targets, he said he looks everywhere.

“I have discussions with everybody because I am an open guy,” Drahi said. “I like different cultures, so I like to discuss with Israelis, Americans, The Dominican Republic, the French, everybody,” Drahi said. “But you cannot buy everything at the same time. So it depends on what is available, what is the price, what is the future, what do you think about interest rates, what do you think about economics, do you thin Europe is going to recover, do think the US  will grow like that, do you think Israel is better? This is a big part of my decision making”

Drahi mentioned that Altice USA is the fourth largest cable operator in the country and the eight largest telecom provider, ranks that fall short of his past comments that anything lower than third place in a market wasn’t worth being in.

Drahi acknowledged that is US ranking falls short, but added that could change.

“I said, ‘If we are not No. 1, or No. 2, or No. 3, it’s not very exciting,’” Drahi said. “How do you get there? I really don’t know. Or if I do I can’t say.”

But he later offered a hint at is blueprint for success in other markets.

“I have always been very clear, that first is fixed [networks], then mobile, then content,” Drahi said. “We started in the U.S. with cable. We are too small in cable to go mobile at the moment. But everything is open. We will see.” 

 

 

 

 

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