It has been an interesting side story to the pending Comcast-Time Warner Cable merger drama: what will happen to Bright House Networks, the 2.1 million-subscriber cable operator whose business relies heavily on shared programming contracts with TWC?
One possible outcome has emerged with reports that Bright House has held talks about being acquired by Charter Communications.
But any deal would happen only after the Comcast-TWC merger is completed, according to Bloomberg. That process that has taken longer (and seems less likely to get accomplished) than originally thought.
If Comcast and TWC don’t merge, Charter is likely to try again to acquire TWC. It was Charter’s original offer that led Comcast to make a bid, one that TWC accepted.
Again, per the Bloomberg report, Charter would pay stock valued as much as $12 billion for Bright House, the second-largest privately owned cable firm behind Cox Communications. That figure uses a similar per-subscriber valuation as TWC in the Comcast deal, so it might be high.
But Bright House, which has its biggest regional operations in the Tampa and Orlando, Fla., areas, is well-managed and has markets that would mesh well with Charter’s existing systems. It also operates in Indianapolis, Detroit and Bakersfield, Calif., near existing Charter properties.
Charter declined to comment. Bright House said in a statement: “While we have had conversations with many parties about [the Comcast-TWC] transaction, we do not have an agreement with anyone regarding future plans for Bright House.”
Bright House emerged as a separate company in 2003, coming out of a former joint venture between Advance/Newhouse and Time Warner. TWC has the right of first offer to buy Bright House, MoffettNathanson principal and senior analyst Craig Moffett said last week, so if talks are being held with Charter, TWC has presumably taken a pass.
But that situation could change if TWC’s merger with Comcast falls apart and if TWC still wants to fend off a Charter takeover. Acquiring Bright House and its added leverage could make a deal less attractive to Charter, Moffett noted.
Charter also is underscoring it wants more cable — even though, as Moffett noted, Bright House has at least 30% overlap with Verizon’s FiOS TV, second only to Cablevision Systems.