With the approval process for its $69 billion mega-merger with Comcast beginning to gather steam, Time Warner Cable chairman and CEO Rob Marcus told an industry audience Wednesday that his team’s top priority is to focus on execution and deliver the MSO in its best shape ever to its new owners.
“We’re playing for pride, to some extent,” Marcus said at the Deutsche Bank Media, Internet & Telecom conference in Palm Beach, Fla. Wednesday. “We can’t lose track of the fact that after the deal, about one-third of the new Comcast cable business will be the business we’re currently operating. How we perform over the coming months bears directly on how the new Comcast would perform.”
Comcast made its $158.82 per share offer for TWC on Feb. 13, trumping an unsolicited bid from Charter Communications for $132.50 per share.
Marcus said that both Comcast and TWC have formed small integration steering committees for the merger, but for now the focus is on getting through the shareholder and regulatory approval process. He said that TWC should file an S-4 registration statement with the Securities & Exchange Commission – one of the first steps in the shareholder approval process – in the coming days.
Marcus said that he expects the integration process with Comcast to go easier than past efforts by TWC. He referred to TWC’s 2006 acquisition of Adelphia Communications – a joint acquisition with Comcast. The company did run into some snags in the Los Angeles market early on in the integration process as part of that deal.
“Different transaction structures lead to different degrees of difficulty in terms of integration,” Marcus said. “We sliced and diced Adelphia into numerous different pieces. We had a whole bunch of other moving parts -- Comcast owned an interest in Time Warner Cable – so we did split-offs, we did swaps, we did the Adelphia transaction, there were an awful lot of moving pieces. I think that this should be an easier integration process than that one was.”
On the regional sports network front, Marcus said that he expects other distributors to sign up for its Los Angeles Dodgers RSN – SportsNet LA – closer to opening day of the Major League Baseball season on March 22, when the Dodgers and the Arizona Diamondbacks square off in Australia. TWC agreed to manage the Dodgers network last year, and will pay a reported $8 billion over 25 years for the right. So far, only TWC and Bright House Networks have agreed to carry the channel.
“Not surprisingly – and we had the exact same experience with the Lakers – all of the action happens on the eve of opening day,” Marcus said. “It’s the typical game that occurs, whether we’re the party seeking distribution or whether we are the party on the other side of the transaction where we are providing distribution.”
Marcus also appeared to downplay earlier reports that its Dodger contract is tied to the number of subscribers to the channel. Earlier reports on the deal have said that TWC, which has about 2 million subscribers in Dodgers territory, would pick up the network’s monthly subscriber fee if other distributors don’t carry the network.
“Our license fee to the Dodgers is not driven by subscriber volume,” he said.