And that’s that: Following a board meeting last night, Comcast terminated its $45.2 billion plan to buy Time Warner Cable. “It wasn’t going to happen,” CEO Brian Roberts told Comcast-owned CNBC this morning. “That’s the judgment that we heard and the government had reached.” He declined to say whether the views of the Justice Department and FCC were shaped by reports that Comcast influenced its partners at Hulu to not auction off the online service, potentially turning it into a cable competitor.
Roberts seemed strangely blase about the collapse of an agreement struck in February 2014. He “would have liked to bring our great products to new cities.” But his company “structured this deal so that if the government didn’t agree, we could walk away” without paying a break-up fee, he said in a formal statement. He added on CNBC that “we report earnings in 10 days and the momentum in our company has been great.” Indeed, the collapse of the deal with TWC “opens the way for further stock buybacks.”
Comcast shares are up abut 1% in initial trading, close to an all-time high. The company’s stock appreciated 9.5% since it made the deal with TWC. The No. 2 cable company appreciated 12.1% since then, and is up 2% today as investors wonder whether Charter or someone else will return with an offer now that TWC has indicated it’s for sale.
In an SEC filing, the companies say that they “mutually agree” to end the merger. Comcast also delivered a “notice of termination” to Charter, ending a collection of contingent deals that would have made it the No. 2 cable company — heavily concentrated in middle America — and created a joint venture they expected to call GreatLand Connections. Charter’s agreement to buy Bright House Networks also was contingent on Comcast consummating its deal with TWC.
In addition to watching the moving pieces in cable, all eyes will be on Comcast’s dealings with companies that opposed its merger including Netflix, Discovery, and Dish Network.
FCC Chairman Tom Wheeler says the collapse of the deal “is in the best interests of consumers.” A combo “would have created a company with the most broadband and the video subscribers in the nation alongside the ownership of significant programming interests.” That would have “posed an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers.”
Attorney General Eric Holder agrees, calling this “a victory not only for the Department of Justice, but also for providers of content and streaming services who work to bring innovative products to consumers across America and around the world.”
Other opponents of the deal also are crowing.
Dish Network Deputy General Counsel Jeff Blum called this “the best possible outcome for consumers, who deserve innovative, thriving video and broadband marketplaces.”
Writers Guild of America, West President Chris Keyser says it shares “with our allied organizations the satisfaction of knowing that this merger has been stopped and that both the public interest and writers’ interests have been protected.”
Writers Guild of America, East says it’s “gratified” because its members’ work “is diminished by the increased power of content-and-distribution behemoths like the proposed Comcast/NBCU/TWC.”
Free Press CEO Craig Aaron says the “demise of this merger, alongside the Net Neutrality victory from earlier this year, mark the rise of Internet users as a powerful political constituency that can no longer be ignored by elected officials and policymakers.”