While he hasn’t decided whether to oppose the deal in Washington, DirecTV CEO Mike White says Comcast’s $42.5B pact to buy Time Warner Cable would result in “unprecedented media concentration in one company.” The No. 1 satellite service provider is “still assessing some of the competitive implications” but White wants to “ensure it’s appropriately scrutinized” — especially the “effective broadband monopoly they might have in two-thirds of the country.” The owner of NBCUniversal also would have a lot of power to raise content prices. That “creates some significant changes in the competitive landscape that we have to think hard about.” Couldn’t Comcast use its clout, with 30M subs after a merger, to slow the rate of increase in programming costs? Perhaps, but “it’s a complicated dynamic because that leverage may not flow through to its competitors.”
White says he’ll continue to resist high programming costs.”None of our customers have an income like those of us on the call here.” He wouldn’t comment on the state of the carriage negotiations with The Weather Channel, which went dark on DirecTV in January, but says that his company “may have lost a few thousand customers in the first quarter” due to the dispute. “Fundamentally I continue to believe if your viewership goes down ….that should be reflected in the price.”
Pricing concerns also weigh on talks to carry Time Warner Cable’s new channel for Los Angeles Dodgers games. TWC made “an unprecedented deal for local sports rights” and wants “over double what others charge per customer per game….It’s a staggering increase relative to any benchmark in Major League Baseball.” Depending on how negotiations progress, the company might have to charge local customers a “more than average surchage.” Continuing price increases “are what drive people to want to see a la carte.”
DirecTV shares are up 2.8% in afternoon trading after it reported Q4 earnings that beat analyst expectations, and said it will repurchase $3.5B of its stock in 2014.