There is news today in the cable TV industry in the US where market leader Comcast has agreed to buy Time Warner Cable (TWC) for a whopping $45 billion. The deal heads off a takeover bid of TWC by John Malone’s Charter Communications and creates an empire which USA Today reckons will include 68 million subscribing households across the nation with revenues of $88 billion. This is a blow for Malone, who wanted to take over TWC with Charter Communications, which has about six million subscribers and revenues of around $8 billion a year. Malone has been promoting market consolidation for some time but this is not what he was hoping for. It remains to be seen whether this will increase or decrease his interest in the Formula One group, which he sees as a valuable content provider for his global TV networks.
As one can see from the numbers involved these companies are large enough to snap up the F1 business without too much trouble.
It is also worth noting that Comcast also owns NBCUniversal, which broadcasts F1 in the United States, so the new deal should increase the number of F1 viewers in the US.
joeblogsf1 
It’s also worth noting that cable has dropped 5 million subscribers in the US in the last 4 years, with Time Warner alone losing 300,000 in the 3rd quarter of 2013. Cable in the US is in decline from OTT services and in sports from content owners who are streaming directly to the consumer by-passing cable.
Actually you will find that Comcast gained subscribers in the last quarter, with 43,000 new people signing up.
I don’t know the figures, but I cancelled my cable service 2 1/2 years ago, as many of my friends have, preferring streaming services such as Netflix. However, in the US, the cable companies provide internet access as ISPs so they can potentially throttle back internet service on a discretionary basis particularly to those customers who are using streaming services, which rival cable content. Also, it does not look like the legislators and justices are going to force the ISPs to provide net neutrality any time soon as the internet is not yet regarded in the US as a utility like gas, electricity, and the telephone. It will be interesting to see how the cable/streaming rivalry pans out.
Yep, I’ve cancelled too. Net neutrality is a big issue, especially since the interwebs were developed by the government, not private industry. And seriously Joe, listen to and respect the input you are getting from us Yanks re cable and F1 in the US of A.; feet on the ground and all that.
“Respect the input you are getting from us Yanks…”
So your opinions regarding cable and ISP’s in the US represent all American opinions, including mine? Respect the fact that you may be speaking for yourself…
I didn’t say ‘respect only my opinion’ – I said ‘respect the input you are getting from us Yanks…..’ That might be interpreted to include you and anyone else who posts. I don’t claim to speak for you and nowhere did I say that my opinion represents all American opinion. Clear enough?
Time Warner already carries NBCSN. There won’t be a net gain in households, they already have access to the programming.
Right… when cable companies provide content, they want that content everywhere, not just on their own wires… in part, this is because cable companies rarely compete among themselves within a given market, they’re more like a patchwork of terratorial fiefdoms… so, NBCSN (NBC Sports Network) is already carried by most cable companies… the only benefit F1 might see is increased promotion, but to me that seems very doubtful as nobody seems motivated to ramp up the quality of coverage…
Exactly right. Comcast is also noted for its lousy service and relentless repackaging and repricing of programming options. NBC’s handling of its F1 coverage is also a constantly moving target, with a single weekend’s broadcasts often spread over three separate NBC channels. Comcast are essentially the Microsoft of cable: relying on sheer market muscle to push an at-best mediocre product… so this is anything but a clear win for F1 in the US.
One of Britain’s best exports in the hands of the Americans…
‘Just look what happened when you shipped your language over here, Bubba…
Formula Yo Dude!
What them there cars need is mini-guns! That’d spice up the show!
I understand that this deal still has to be approved by the FCC…
Well, it happened yesterday…
The deal isn’t final until it’s approved by the FTC as well. Sometimes, parties have to make some form of concessions (off loading certain assets) to obtain their final approval.
It will need to go through many layers of approval, including antitrust (DOJ), FCC and state PUC approvals, all told will take about 18 months. Each of those processes will include significant opposition from various lobbies.
I still see this going through with two major conditions: 1) Comcast agrees to new/extended prohibitions against discriminatory pricing/performance for over the top services, and 2) divests assets in the limited markets where they overlap with TWC.
I don’t. The gov’t stopped AT&T from buying T-Mobile, and the antitrust argument against Comcast getting TWC are at least as strong and probably stronger… if I had to bet, I’d bet aganst it…
It will be an uphill battle for them to get approval. At the very least they’ll have to divest some markets and likely make some other changes. The footprint would be so big it would not only impede any competition on the cable TV side but on the Internet side as well. Netflix is already a thorn in the side of the cable companies and this can be used as a play to pinch them even more. They are claiming Google and the new Google fiber project as competition but AFAIK Google hasn’t launched in except two or three markets.
Too soon to see if they will get approval.
That’s incredibly, suspiciously, cheap! For a turnover of $88Bn you would expect to be on a P/E of at least 3 or 4 up to 20 ish. But this gives a P/E of about 0.5 !
On the subject of pay tv, I have just bought a “NowTV” box for £9.99 which has a 720dpi output and allows connection to a lot of internet tv channels (Roku) and to Sky. It allows me to buy a day of any Skysport channel for £10, So it means I can watch either quali or the race or both for £20. Also gets the BBC iplayer and that of Ch4 and 5 but not ITV. You cannot get the free channels though, until you have bought a bit of sky. (Sport, film or entertainment) So I have paid for one day of Sport but wont use it until oz. Meanwhile it means I can now access the other free channels.) Its better than paying a full time sky subs but not ideal.
No, the E in P/E stands for earnings, i.e., profits, not turnover!
The FCC approval process can take forever. Public and Congressional hearings and it’s already drawn scrutiny from several groups. I doubt it will ever happen in its proposed form!
At this point all that has occurred is the announcement that the boards of both corporations have reached an agreement. Approval of the FCC, the Federal Trade Commission and the Justice Department’s Antitrust Division must be obtained before proceeding. It should also be noted that such approvals are not handed out with quite the alacrity they were, let’s just say, ten years ago…
Joe: TimeWarner already carries the NBC family of networks, so I doubt this deal will add nitrous oxide to the already growing numbers of F1 viewers on American television.
If I understand the TWC website, the NBCSC is only available on the most expensive package. On Comcast it is available on all three. Comcast could make the channel more available, especially since they will be paying NASCAR a lot starting next. Ergo, more US F1 viewers.
I saw something where the Comcast CEO was a guest at a state dinner President Obama held for the French Prime Minister. That doesn’t mean automatic approval but they don’t grab people off the streets to attend.
I’ll take this moment to state that the NBC coverage of F1 is abysmal. The frequency of commercial interruptions is to the point of ruining enjoyment. It’s impossible to imagine a newcomer to F1being engaged enough to ever watch another race and hardcore fans inevitably are dissatisfied. The only avenue is, well we all know what they are. Unless FOM wakes up and finds a way to make Sky or BBC or some other good od coverage available in the US, F1 will never gain any significant foothold here.
The commercial interruptions for NBC’s coverage of F-1 are no worse than is was when FOX handled F-1. In fact, they show the last five or so laps of the races interruption free, something SPEED never did. As for COMCAST, my beef with them is that they will not grant us access to FOX SPORTS 2, which carries a lot of the content that was formerly on SPEED. For the Rolex 24 at Daytona, FOX split it’s coverage between three networks. Five hours of prime time coverage were on FOX SPORTS 2, meaning IMSA lost millions of potential eyeballs on it’s new product. Not a good way to start out.
Well, in truth they’ve expanded the length of commercial breaks from 2 minutes to 3 minutes for those breaks which have a PIP window of live action… and because they moronically insist on proportioning that view for ancient 4:3 TV sets, the live action window is microscopic on a big TV… all of which means significantly more annoyance and less racing…
When you also factor in the mindless, hypesterism of Leigh Diffey as a replacement for the professional and properly-interested Bob Varsha, the change in network has been a very strong net negative IMO…
The US is used to commercials that frequently during a broadcast. That’s just how it is. F1 isn’t as popular as in other place for a few reasons. First, there aren’t any US drivers. That’s the biggest one. Second, the timing is horrible to carry live. Happening outside the US there is nothing they can do. The reason more int he US don’t watch has nothing to do with the NBCSN broadcast or the amount of commercials. It’s that most of the folks aren’t interested.
Comcast only has about 22 million subs, TW has about 11 million. They announced that they would likely sell off about 3 million, leaving a combined ~30 million subs. Maybe 68m eyeballs, but not subscribers.
From WSJ:
Comcast: 21.7 million
Time Warner: 11.4 million
USA Today has different figures.
We can now begin to observe all the lazy so-called reporters who behave as stenographers rather than journalists (am not talking about you, Joe!) going along with Comcast’s very purposeful effort to portray this proposed bad deal as inevitable…