The Communications Workers of America has objected to Altice’s pending $17.7 billion acquisition of Cablevision Systems, saying the deal isn’t in the public interest.
In a formal objection filed with the Federal Communications Commission, the CWA, which represents about 300 Cablevision workers in Brooklyn, said the deal’s heavy debt component (about $8.6 billion) will lead to downsizing. The union also pointed to Altice’s reputation for refusing to pay contractors and outsourcing key functions of the business.
“Altice’s track record in France and Portugal clearly shows the danger this deal poses to Cablevision’s customers and employees,” said CWA District 1 Vice President Dennis Trainor in a statement. “Altice takes on too much debt, outsources as much work as possible and then downsizes its workforce. Customers get worse service and employees lose their job. Unless Altice makes commitments to protect customer service and Cablevision employees, the FCC should reject this deal.”
Altice agreed to purchase Cablevision in a deal announced in September and has said it expects to close the transaction in the first half of 2016. As part of the purchase, The European telecom company has said it will take on $8.6 billion in debt to finance the all-cash transaction. The union and Cablevision have had a contentious relationship over the past few years. The union was able to organize about 300 tech workers in Brooklyn earlier this year but failed in attempts to unionize Cablevision operations in the Bronx. Cablevision has about 13,656 total employees.
“Altice has a track record of investment, innovation and customer service in all the communities we serve. We look forward to a fair and open regulatory process in connection with our proposed Cablevision transaction, and as in all of our other territories we expect to deliver significant benefits to consumers and their communities in the Tri-state area,” Altice said in a statement
The CWA said coupled with Cablevision’s existing $5.9 billion in debt, it will force the combined company to initiate such deep cost cuts that “both staffing and network investments are likely to suffer, to the detriment of both consumers and workers.”
Altice has said that it plans to shave about $900 million in operating expenses from Cablevision after the deal, mainly by applying European-style business practices. Several analysts and even one top cable executive have said in the past that squeezing that much from operations could be difficult. In its filing, the CWA said that will likely mean “significantly worse” customer service and pointed to a Deutsche Bank report that said in France Altice-owned Numericable-SFR lost 1.256 million mobile subscribers (5.4% of subscribers), 246,000 retail broadband subscribers (3.7% of subscribers), and 719,000 home connections (7.2% of subscribers) over the past year (3Q2014 to 3Q2015).
In addition, CWA said in France and Portugal two Altice companies were fined $410,000 each for not paying its contractors.
The CWA said it plans to weigh in with the New York State Public Service Commission, the New York City Franchise Concession Review Committee and the Connecticut Public Utilities Regulatory Authority, all of whom will play a role in reviewing the deal.