Execs See Smooth Shift as Deal Closes

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While integration will be the buzzword for Time Warner Cable and Comcast Corp. executives for the next 12 months as they wait for their $17.6 billion acquisition of Adelphia Communications Corp. to close, two top executives at the acquiring MSOs said Friday that they believe this will be one of the easier ones.

Both Time Warner Cable and Comcast have experience with putting together diverse systems. Time Warner has integrated about 6.8 million subscribers through acquisition in the past 15 years, according to chairman and CEO Glenn Britt. And Comcast had one of the more successful integration stories in recent memory when it absorbed AT&T Broadband’s 13 million subscribers a little more than two years ago.

Comcast executive vice president and co-chief financial officer John Alchin said in an interview that while no integration is easy, the fact that the 1.8 million Adelphia and Time Warner Cable subscribers it is acquiring as part of the deal are mostly located near existing Comcast clusters makes the process less murky.

“Given that the net addition of 1.8 million subscribers -- we’re still only at 10% above our current footprint, and it’s 10% that is dovetailed for the most part up against systems or geographic areas we already do business in -- I think this is going to be relatively straightforward,” Alchin said.

He added that while Comcast is waiting for the deal to close -- expected in nine to 12 months -- Comcast executives will likely be poring over their marketing plans and budgets in preparation to implement their plans for the Adelphia systems soon after the deal closes.

“In concept, that is absolutely the path that we will be taking,” Alchin said. “At this stage, step one is that our franchise-transfer people are already gearing up to get in the franchise-transfer applications. Then there will be a modified version of what we have done before with Mike Tallent and Dave Watson as CFO [chief financial officer] and COO of the cable division at some point in the next three, four or five months will begin that very intense, bottoms-up budgeting exercise.”
Britt -- who is taking on about 3.5 million subscribers from Adelphia and Comcast -- agreed that having most of these systems located near Time Warner clusters will help the integration process.

“Most of the properties we’re getting are adjacent to or part of our existing DMAs,” Britt said. “For those properties, they’ll just slide right in to our existing operations.”

Time Warner Cable CFO Landel Hobbs said that integration will be handled on a corporate and regional basis.

Earlier last month, Time Warner Cable began a periodic process of shifting some geographic responsibilities for its operational executive VPs, planning to move some out of its Stamford, Conn., headquarters and out into the field.

While that process is ongoing, Hobbs said, one new position will be created: a regional executive VP for the Los Angeles market.

“We’re approaching this like you would normally expect,” Hobbs said. “There will be an integration team up top that will globally handle integration, and there will be regionally based things as we integrate the system in. We’re approaching it in a structured integration approach using operating people who know cable.”

Britt said that while the Los Angeles executive has not been named yet, it will possibly be an existing Time Warner Cable employee.