The incoming CEO of Time Warner Cable will walk away with more than $50 million just for getting out-of-the-way of a sale or breakup of the company.

Robert Marcus is scheduled to take over the CEO role Jan. 1 after Glenn Britt retires. But there is a good chance Marcus won’t have a cable company to run if executives decide to accept anticipated takeover offers due within weeks that could turn ownership of Time Warner over to Charter Communications or split up subscribers among several potential buyers including Comcast, Cox, and Charter.

Reuters reports Marcus will earn the most if he can hold off buyers for the next four weeks until he becomes CEO. Under his employment contract, Marcus would then qualify for a generous goodbye package:

• A compensation bonus amounting to three times his base salary of $1.5 million;
• A departure award amounting to three times his usual $5 million annual bonus;
• Permission to cash out the large amount of stock he has earned as part of his compensation, now valued at $37 million.

In total, Marcus could earn $56.5 million for just one day of work — long enough to shake the hands of the new buyer(s) and head for the elevators for the last time. If the company sells before Dec. 31, Marcus will still land on his feet, earning a severance package valued at $47.5 million.

In a separate move, Time Warner Cable executive vice president Peter Stern dumped 4,253 shares of his company’s stock at $130 a share, taking $552,890 in compensation.

While top managers are routinely offered generous departure packages more commonly known as “golden parachutes,” thousands of lower-level Time Warner Cable employees will likely face the ax within months of any sale, predicted one analyst. In similarly sized mergers and buyouts, the largest job losses will impact call center workers and middle management. Other employees will likely leave if asked to move to regional operations centers in other cities where the buyer(s) operate. At least one analyst said it was unusual for Time Warner Cable to proceed with a CEO switch while the company is in play.

Marcus understands how the business of mergers and acquisitions work; he started his career as an attorney specializing in the practice.

Verizon is notifying some of its FiOS TV customers they will be paying $8 more a month “within 1-3 billing cycles” and a dollar more a month for the Regional Sports Network Fee, applicable in some areas.

(Courtesy: andrade6503)

Cable operators are increasingly breaking out high cost programming, including sports and local broadcast stations, from the basic cable tier and adding surcharges on the customer’s bill, often with no option to cancel the offending programming. Many operators also leave the price of their basic cable packages the same, creating a surcharge-driven, hidden rate increase.

Pay television providers have argued that some of the biggest rate increases occur after programmers raise prices during contract renewal talks. Breaking the fees out on the bill can re-target blame for rate increases on programmers instead of the cable, satellite, or telephone company, assuming customers scrutinize their bill.

Verizon “redacted” hundreds of pages of information about its controversial Voice Link project, including its User’s Guide.

Verizon today lost its appeal to keep company documents about its controversial Voice Link wireless landline replacement away from company critics that allege the company is intentionally undercutting its landline network and redirecting investment towards its more profitable wireless service.

In a 20-page decision published this afternoon, Kathleen Burgess blamed Verizon for hurting its own case with excessive secrecy.

“But for Verizon’s failure to submit documents with fewer redactions, as directed by the Records Access Officer (RAO), it might have satisfied its burden of proof,” that the company would suffer harm if it released proprietary information that could be accessed by competing providers, ruled Burgess.

Burgess took a dim view of Verizon’s attempt to claim blanket confidentiality for its Voice Link project, even including a redaction of Voice Link’s User’s Manual — the same one given to customers subscribing to the service. Burgess noted in response to a Freedom of Information Law (FOIL) request from consumer groups, Verizon responded with “13 documents – 330 pages – with blanket redactions except for the page headings and page numbers.”

Verizon needed to meet its burden of proof by “presenting specific, persuasive evidence that disclosure will likely cause it, or another affected enterprise, to suffer a competitive injury.”

“Verizon apparently believes that it is possible to meet the burden of protecting information under FOIL by providing a cogent and persuasive explanation of how a competitor could use the information and why it is likely to lead to harm,” Burgess observed (emphasis ours). “As an initial matter, [Verizon] has not parsed out each of the 13 documents and demonstrated how each, if disclosed, would competitively injure it. Instead, Verizon is attempting to obtain a blanket exemption for all 13 documents by summarily stating that disclosure would enable competitors to obtain, for free, information on processes that the company developed at considerable expense and effort. Verizon has, however, failed to demonstrate, in adequate detail, how the complete disclosure of all 13 documents would result in substantial competitive injury.”

Verizon hurt its own case by “co-mingling” detailed cost information that might otherwise win confidentiality with the Public Service Commission with less proprietary marketing information and even publicly available documents and then redacted all of them, according to Burgess.

As a result, Verizon lost its case:

The Commission recognizes that limiting competitor access to proprietary material is an important policy. Exemptions are to be narrowly construed, however. The entity resisting disclosure bears the burden of proof and, therefore, must demonstrate a particularized and specific justification for denying access to the subject documents. Absent such a showing of competitive injury covering each document that comprises the response, the speculative concerns articulated by Verizon are not enough to sustain the company’s burden of proving that the information should remain protected as trade secret materials.

[…] Under FOIL case law, the burden is on Verizon to demonstrate a particularized and specific justification, supported by evidence, for denying access to the documents at issue and, inasmuch as Verizon has failed to meet its burden, I uphold the RAO’s November 4, 2013 Determination.

Absent a court order or later ruling, full versions of the blacked-out documents may become public two weeks from today.

In Search Of… Savings

The cable industry’s week-long feeding frenzy over consolidating Time Warner Cable out of existence comes with the theory that growing larger guarantees cheaper programming costs from volume discounts and influence. But hang on, says Wall Street analyst firm Sanford C. Bernstein.

This week, senior analyst Todd Juenger released a report, “Will Cable Consolidation Slow Down Affiliate Fee Growth? We Say ‘No,’” that questions the theory the bigger the company, the more leverage available to keep costs down.

Juenger says that few customers are in love with their local cable company, and programmers know it. If another brawl erupts between CBS and a cable operator, the presumption of leverage to quickly resolve the dispute is more hope than reality because customers will readily abandon one provider for another to get what they want.

“Consumers are much more loyal to their favorite TV networks than they are to their distributor,” Juenger says. “Every time a distributor has tried to fight back by dropping the content from one of these [big programming] companies, it has ended badly for the distributor because consumers will switch distributors, not TV networks.”

Programming carriage wars will continue to hurt cable companies as long as there is a satellite or telco-TV competitor ready to sign up disgruntled customers. If a suite of Viacom-owned networks are dropped during a cable fee dispute, the cable operator will save around $2.75 a month per subscriber. But if that subscriber decides to change providers, operators lose as much as $40 in marketing costs paid to attract that subscriber in the first place.

Juenger believes the only way combining cable operators will save on programming fees is when smaller cable operators like Charter get the benefit of big discounts on programming offered to larger, high volume providers like Time Warner Cable.

Juenger adds bringing Comcast in as a buyer gets complicated because if Comcast tries to drop networks, programmers might have leverage by appealing to the federal government with claims Comcast is violating its agreement with the federal government to avoid abuse of market power to strangle competitors.

It’s happy days at Comcast’s marketing and public relations department. How does a cable company pocket an extra $1.50 a month from 21.6 million cable TV customers without facing the wrath of the masses? Blame it on greedy broadcasters and quietly bank up to $32.4 million a month in new revenue.

Comcast wants to break out the cost of some of its programming disputes with local stations from your monthly cable bill and add an extra $1.50 monthly surcharge the company is calling a “Broadcast TV Fee” starting in the new year.

Comcast isn’t promising this $1.50 fee covers the total cost of licensing local stations for cable carriage, and they have no plans for similar surcharges for cable networks that have also been known to ask for a lot at contract renewal time. Customers may not realize that in some cases, the local NBC station just so happens to be owned by Comcast-NBC, offering easy opportunities to boost the asking price without too much trouble from co-workers at Comcast Cable.

Broadband Reports notes that isn’t the only new fee coming soon to a Comcast bill near you, starting Jan. 1. The company is also raising prices for cable television by $1-2 for many tiers, increasing the modem rental fee another dollar to an unprecedented $8 a month, and jacking up rates by $2 a month on almost all levels of broadband service.