Charter CEO Chris Winfrey acknowledged the “chatter” in the media business and on Wall Street about a potential merger with Comcast, but said such a megadeal is not “core” to his company’s strategy.
During a conference call with analysts to discuss Charter’s better-than-expected fourth-quarter results, Winfrey was asked directly about a Comcast tie-up and his view of M&A more broadly. The top exec didn’t completely rule out dealmaking, but said closing a transaction with another major player won’t necessarily be any easier during the Donald Trump administration.
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“I know there’s a lot of chatter out there” about Comcast, Winfrey said. But Charter’s strategy, he continued, “has never been dependent on M&A. In fact, it’s really been moving purely from an organic growth perspective, and how do we create value for shareholders from that perspective? You do that by being a great operator. You do that by saving customers lots of money, providing great service.”
Analysts at Wall Street firm TD Cowen this month promoted the combination in a note to clients. “We believe a Comcast/Charter merger could make industrial logical sense given the scale and subsequent massive synergies,” they wrote. The two companies already participate in a joint venture on connected-TV service Xumo.
Major Charter shareholder John Malone has advocated for industry consolidation, saying regulators have allowed the tech industry to “run wild” while handcuffing traditional sectors like cable. “Charter should be allowed to merge with Comcast or Cox or anybody, to reduce costs and improve quality of the service they provide,” he said at Liberty Media’s investor meeting last November. Comcast’s decision last fall to spin off most of its cable networks into a new stand-alone company was interpreted as clearing the way for a pay-TV merger.
Running a business well, Winfrey acknowledged, “opens acquisition opportunities over time.” Still, he said combining with a large-scale peer won’t be as straightforward as it was a decade ago when Charter bought Time Warner Cable, vaulting to the top of the market-share charts. “The rest of the cable industry, if you sit back and think about it, it’s all family-owned or family-controlled,” he said. “So, it’s in the hands of these families or family-controlled businesses that get to decide when’s the time that they’d like to combine.”