Altice USA’s surprise purchase of digital news company Cheddar earlier this week is not a signal that the cable operator is gearing up to buy more content companies, CEO Dexter Goei told reporters Thursday.
Altice agreed to purchase Cheddar, an online business news service available in about 40 million homes, for $200 million in cash. The deal is expected to close in the next two months.
Cheddar will be paired with Altice USA’s other news channels --local news network News 12 and international news channel i24 News -- in Altice News, which will be headed by Cheddar founder and CEO Jon Steinberg.
In a conference call with reporters, Goei said the Cheddar purchase gives Altice USA a solid foothold in digital business news, complementing its other news operations. While that could lead to advertising opportunities -- perhaps bundling the channels and giving advertisers an opportunity to purchase ads across platforms -- it doesn’t mean that the cable operator is preparing for a content buying spree.
While other operators continue to dabble in content -- Comcast owns NBC Universal, AT&T owns Turner networks and other smaller operators have bought smaller networks -- Altice has stuck to its distribution guns. Goei said there is no reason to believe that stance has changed.
“We are not interested in acquiring more content,” Goei said. “This was a very targeted acquisition to complement and fill certain gaps in our news and advertising business today.”
Goei said that while Altice USA has hyper-local (News 12) and international news (i24) operations, it lacks business and national news, two gaps that Cheddar fills immediately. The purchase also allows Altice USA to tap into an attractive millennial demographic.
“Advertisers are always looking for a wider reach and also a very defined and targeted audience,” Goei said. “What Cheddar has done phenomenally is create a brand that has become very attractive for national TV advertisers. Also, we can provide a tremendous amount of interesting inventory to those advertisers on a local basis, having the No.1 hyper- local channel with News 12, and a very distinctive newswatching demo on i24, that brings a very complement suite of content and advertising inventory. There is a lot of hidden value in our assets which we think Cheddar unlocks going forward.”