$45.2B Comcast, Time Warner Merger Could be Good News for Apple

| Analysis

What do you do if you have an extra US$45.2 billion sitting around? If you're Comcast, you buy Time Warner Cable. Comcast announced on Thursday that it's doing just that and plans to complete the deal before the end of the year. That could turn into a content licensing deal opening Apple TV to potentially 30 million customers.

Comcast to buy Time Warner in $45.2 billion dealComcast to buy Time Warner in $45.2 billion deal

Comcast said in a statement,

Comcast Corporation and Time Warner Cable today announced that their Boards of Directors have approved a definitive agreement for Time Warner Cable to merge with Comcast. The agreement is a friendly, stock-for-stock transaction in which Comcast will acquire 100 percent of Time Warner Cable's 284.9 million shares outstanding for shares of [Comcast stock] amounting to approximately $45.2 billion in equity value.

The combined company will serve about 30 million subscribers, and will merge the features each currently offers to its own customers. Comcast and Time Warner's merger still needs to pass regulatory approval, which the company's expect to take several months.

Assuming the merger doesn't hit any show stopping hurdles, it could have interesting implications of Apple. Ahead of Comcast's announcement, word surfaced that Apple is developing a new version of its Apple TV set top entertainment box that also includes a licensing deal with Time Warner.

The rumored Apple TV update will sport a new interface for easier navigation between TV shows, movies, and other online content. Assuming Apple does land a licensing deal with Time Warner, that content could include programming and other services from the cable provider.

Apple's new set top box is expected to ship by fall, which would come in ahead of Comcast and Time Warner's deal closing. If Time Warner does throw its hat in with Apple, that agreement could be part of the shared services all subscribers get after the merger, giving Apple a content deal with Comcast without ever having to negotiate with the cable provider.

Apple still calls Apple TV a hobby, although the company has been closing more deals to add special streaming channels to the device such as HBO Go, ESPN, ABC, and Disney. With the growing number of channels available now, it's clear Apple has bigger plans for Apple TV, and that points to a couple paths: games and TV service provider deals.

Adding gaming console features to Apple TV is something the company can do without involving too many big name partners to start, but cable deals require extensive licensing deals, and that involves working with companies like Comcast and Time Warner. If Apple has played its cards right, it managed to swing a content deal with two of the big players in that market while having to negotiate with only one.

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Comments

Lee Dronick

I have a different cable/internet provider, would they allow content from CastWarner? I would think so, but I still ask the question.

Games don’t interest me, I want more content in the way of news, history, science, arts. Currently I use my Apple TV a lot for streaming my iTunes out through the sound system attached through the TV. Also videos that I have created.

Jamie

Yes, precisely. This could be one of the most obscene monopolies we’ve yet seen - one corporation controlling the pipes *and* the content. Amazed this was approved. Do we honestly believe Comcast would make concessions for anyone, let alone Apple? I highly doubt it.

My faith in my country’s legal system and priorities dropped a few more notches with this one. I wonder how much of that $45.2 billion is flying straight into judge’s pockets? So much of the precedent that has been set in the second decade of this century has been very bad news for the future, in so many ways.

And we thought Microsoft in the 90s was bad. We ain’t seen nothin’ yet. . . .

Lee Dronick

It hasn’t happened yet, it still needs FCC approval, probably some other agencies too.

MacFrogger

Jamie: “My faith in my country’s legal system and priorities dropped a few more notches with this one. I wonder how much of that $45.2 billion is flying straight into judge’s pockets?”

Corporations that announce an intended merger does not mean that the govt, our legal system, or any judge will automatically approve it.  In fact, they very well may nix it or impose other conditions seen as harsh enough by the companies involved to cancel the merger.  Remember like two years ago when AT&T announced plants to buy T-Mobile?  The govt imposed conditions on the merger that AT&T saw as too harsh - so the deal was cancelled (AT&T had to pay a big sum to T-Mobile as a break-up fee, which must have caused some executive indigestion).  Now T-Mobile is an aggressive competitor to AT&T, so…more executive indigestion?

I think its safe to answer your Q that none of the $45B has made its way into any judge’s pockets - nor will it.  Judges will not be making the decision to allow the merger, it will be an agency of the federal govt.  (Once the decision is made, it may very well get challenged in court, but we’ll leave that one for comment on some future post.) 

As for your faith in “the system”: the system is only as good as your continued involvement in it as an educated citizen who carefully exercises your right to vote in honest reps at all levels of govt.  The people manipulating the system towards fraud count on you and others to not pay attention (minimally) and ultimately to give up on it because its seen to be too corrupt.  Then they will be able to do whatever they want.

MacFrogger

Thanks Lee for beating me to the punch!

Lee Dronick

  Thanks Lee for beating me to the punch!

It had just happend that I had the midday TV news on and one of the anchors was reporting that this was a done deal. I don’t know if it is him or his producer, but he sure reports a lot of rumors and pending stories as fact. Of course I had to yell at the TV. I have on a number of occasions emailed them and gave them links to actual news.

As to elections and representitive government it is small percentage of eligable voters who actually vote. An even a smaller percentage who participate in the process. I will attend a local meeting with a City Councilmember, State Assemblymember, or Congressional Representative and only few citizens are there. At times it has just been me.

MacFrogger

I know the feeling Lee - same here.  Was it Jefferson who said the people will get the democracy they deserve? 

As for TV news, it has gone all downhill since the days when the Big 3 actually cared about their news depts - they actually competed on the basis of fairness and integrity.  Cable news (think CNN) is largely a joke, and no one is better at pointing that out than Jon Stewart.  Fox News should really be called Fox Propaganda, and of course MSNBC is their counterbalance but at least they don’t try to pretend to be a news org.  Its no wonder our country is in trouble…

Lee Dronick

  Was it Jefferson who said the people
will get the democracy they deserve

Often also attributed to Alexis de Tocqueville, but he and President Jefferson probably got it from Joseph de Maistre who said “Every country gets the government they deserve.” Those two guys would have read de Maistre. I also like the one from Pericles, the ancient Greek politician and General, “You may not be interested in politics, but politics is interested in you.”

Yes, very interesting that the comedians Jon Stewart and Stephen Colbert are the ones pointing out that emperors are not wearing clothes. Modern day court jesters.

MacFrogger

Lee said: Yes, very interesting that the comedians Jon Stewart and Stephen Colbert are the ones pointing out that emperors are not wearing clothes. Modern day court jesters.

Honestly Lee, besides being extraordinarily funny I sometimes think Stewart in particular has the best darn news show left on TV!  I watch it every day at lunch, via the web (I don’t do TV any more…it really is a vast wasteland.)  Fortunately, anything worthwhile can be found on the web nowadays.

Terrin

It has not been approved yet. People who oppose the merger need to make a stink. The FCC will have a public comment section, people need to make noise. Noise is what stopped the AT&T merger with T-Mobile.

Terry Maraccini

Methinks that a merger between Comcast and TWC portends of great abuse of customers. Comcast is notorious in its quest to limit bandwidth, prevent choice, and give terrible customer service. Although TWC is no picnic, i can see no good coming from this.

Stifling competition is never a good thing. Number 1 buying number 2 is never a good thing.

I predict: less choice, higher rates, and bandwidth caps.

It’s time for the FCC to declare ISPs like Comcast as common carriers.
Sadly, I don’t think that will happen.

Lee Dronick

  My faith in my country’s legal system and priorities dropped a few more notches with this one. I wonder how much of that $45.2 billion is flying straight into judge’s pockets?

Jaimie you may be partly correct. However, are campaign contributions technically bribes? smile

http://maplight.org/content/73407

Lee Dronick

Jamie, I apologize for misspelling your name.

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