Anaheim, Calif. -- Mediacom Communications Corp. chairman and CEO Rocco
Commisso, always looking for creative ways to keep down programming costs,
floated a witty trial balloon at Thursday's Western Show general session
His plan: Mediacom won't raise rates for one year if his programming costs
hold steady. "Let's have one year of no rate increases, and I'll do the same,"
But when moderator Sallie Hoffmeister of the Los Angeles Times asked
the audience, there was only lukewarm applause for Commisso's idea.
As in years past, rising programming rates became the key topic of the
discussion, which also featured Insight Communications Co. Inc. CEO Michael
Willner, Charter Communications Inc. CEO Carl Vogel, Cablevision Systems Corp.
New York president Tom Rutledge and Rogers Communications Inc. CEO Ted
While Commisso suggested that regulators should take a look at rising
programming costs, Willner warned against the "law of unintended consequences"
that would come with such a move. Willner and Vogel suggested that the
marketplace needs to solve the programming-costs issue.
Commisso went as far as to suggest that programmers charge distributors a
uniform rate, no matter what their size. "One way of handling it is to have a
financial plan where the rates are the same for everyone," he said.
The impact of Comcast Corp.'s AT&T Broadband acquisition was also a big
topic of discussion.
Rutledge said the merger is good for cable because "having Comcast take care
of the old TCI [Tele-Communications Inc.] assets makes the whole industry more
Willner said the merger would result in cheaper programming rates for
Insight. "We have certain obligations, as well as certain rights, as a result of
the fact that Comcast is a 50 percent owner in equity of the cable systems we
own and manage," he added.
"You're counting on the programmers to be generous to you?" Hoffmeister asked
Commisso. "I'm asking for favors," Commisso replied. "They all tell me they're
my friend. I want to make sure they mean what they say."
When discussing the prospect of Rupert Murdoch's News Corp. eventually
acquiring DirecTV Inc., Commisso said he's concerned that such a deal would
enable DirecTV to get an unfair look at how his systems operate. "I guess the
bigger question is: Am I going to let my competitor come in and audit my books?"
Other notable comments: Responding to a question about talk that Cablevision
could eventually merge with Time Warner Cable, Rutledge said the MSO would be
just fine on its own.
"It's a perfectly capable business," he added. "Who knows what the future may
bring, but there's no reason why Cablevision can't operate its systems
independently in the New York metropolitan area."
Vogel decided to take a shot at Charter's investors when asked why chairman
Paul Allen isn't putting more capital into the struggling company. Vogel said he
thinks the reason why people are talking about why Paul Allen doesn't put money
in "is to take advantage of their own trading activity, quite frankly."
The session ended with Hoffmeister asking each executive where cable stocks
would be one year from now.
Commisso: "It's definitely going to be up, if I'm around. We're going to have
a great year next year. Let the market decide what our stock should be."
Vogel: "I think our stock will be significantly higher than it is today and,
hopefully, the overhang will be gone."
Willner predicted a 30 percent uptick for cable stocks in 2003.
Rogers: "I'm hoping people will stop asking me when I walk down the street,
`When did you split your stock?'"