Independent television in Great Britain may soon be in the hands of U.S. citizen John Malone, former cable magnate and head of the giant Liberty Global cable and entertainment conglomerate that has swept across western Europe through a series of mergers and buyouts.
Deregulation has allowed the prospect of Britain’s biggest independent network, dwarfed only by the BBC, to soon be owned lock, stock, and barrel by Americans.
U.S. media conglomerates have already picked up the smaller Channel 5 network, purchased by Viacom in a surprise $757 million deal.
ITV produces an enormous number of television shows for its network of regional independent television stations across England, Scotland, Wales, and Northern Ireland. It is these productions that are attracting attention from content-hungry U.S. media companies.
John Malone’s Liberty Global is seen as a leading contender, already owning a 6.4% stake in ITV acquired from BSkyB for $824 million. Liberty Global and Discovery Networks have maintained close association and jointly bid $930 million to acquire All3Media, the production arm of reality shows like “Undercover Boss.”
ITV’s own needs for programming have increased dramatically with the introduction of digital free-to-air television across the United Kingdom. ITV’s single network, operating for decades, is today accompanied by ITV 2, 3, 4, Citv, and Encore.
Malone hopes to build a European media empire, and has amassed holdings including a takeover of Virgin Media and cable systems in Germany and the Benelux region.
Malone has wooed some of ITV’s biggest investors — all American — including Fidelity, which has a nearly an 8% stake, BlackRock, with 4.9%, and the California hedge fund manager Brandes, which has 4.8%.
Malone may face other bidders, however, notably Comcast-NBCUniversal, which has not yet publicly revealed whether it is interested or not.
Another potential benefit of the transaction would be to allow its American buyer to avoid U.S. taxes by relocating their corporate headquarters to Great Britain in a controversial practice known as tax-inversion.
Chicago Mayor Rahm Emanuel has been prominently cited by Comcast as an example of a U.S. mayor that has the insight to support the company’s $45 billion buyout of Time Warner Cable.
But Comcast also had the insight to avoid mentioning it had paid Emanuel and a political slush fund controlled by him more than $100,000 before Emanuel took pen to paper in support of the merger.
The International Business Timesnotes the mayor of the Windy City has deposited giant campaign contributions from Comcast and its top executives for years, including two signed by the author of Comcast’s press release thanking Emanuel for his support himself — executive vice president David Cohen. In addition to a $5,000 personal donation to Emanuel, Cohen also signed a check for $10,000 payable to the notorious Chicago Committee, a political slush fund Emanuel controls and uses to keep other local politicians in line with his agenda.
Since Emanuel first ran for mayor in 2010, Comcast and its executives have spent $50,000 on his campaign. When Emanuel was a congressman, Comcast was one of his top donors — spending $46,000 total from 2003 until 2o08. Other executives gave another $25,000 to the Democratic Congressional Campaign Committee that Emanuel chaired at the time.
With that kind of generosity, Emanuel had no trouble signing one of Comcast’s “template” letters in support of the merger, telling the FCC it was great for Chicago and would enhance Comcast’s “generous presence” in the area. While generous to Emanuel and other politicians, Comcast has pounded Chicago residents with relentless rate increases and perennially receives dismal customer approval ratings from locals.
Although Emanuel’s letter told the FCC the merger would not reduce choice, elevate prices, or otherwise harm consumers, piles of Comcast’s cash may have obscured Emanuel’s vision of what ordinary Comcast customers endure. WLS-TV in Chicago reports Comcast’s customer service borders on “abusive.” (1:38)
Does N.Y. Gov. Andrew Cuomo support or reject the merger of Comcast and Time Warner Cable and why has an administration official been meeting behind closed doors with the companies involved?
If the merger is successful, more than 95 percent of upstate New York will be served by a single cable operator – Comcast, with little chance Verizon will mount a major challenge for video, broadband, and phone service customers outside of the areas where FiOS fiber upgrades have been announced. Although the Cuomo Administration promised an in-depth investigation into the merger, the governor has kept his own views close to the vest and has not publicly supported or opposed the transaction. But an administration official has met privately with executives of both cable companies and state regulators behind closed doors according to a new report.
According to public schedules obtained by Capital, Comcast representatives met at least three times in August with PSC members or staff in what one former commissioner called unusual circumstances.
James Larocca, a N.Y. PSC commissioner from 2008-2013, said it is not typical for officials from the governor’s office to meet with state regulators and cable executives in the same closed-door meeting.
“I did not meet with the second floor on pending matters and I’m not aware that other commissioners ever did,” Larocca said.
It is not unusual for companies with business before the Commission to meet with its staff or commissioners in ex parte conversations to set the parameters of hearings, filings, and other regulatory proceedings. All such meetings appear to have been properly disclosed by the PSC staff and the companies involved. But the fact some were held behind closed doors with a Cuomo Administration official and without public disclosure of the subjects discussed bothers some.
Susan Lerner, executive director of Common Cause New York, said what was discussed behind closed doors should be disclosed so the public can see what top state officials are saying to the cable executives.
“There are questions as to whether the PSC is a strong enough advocate for the people or the industry,” Lerner told Capital. “The agency has lost sight of its initial mission, which is to serve the public in regulating these absolutely essential services.”
Gerald Norlander at the Public Utility Law Project ponders what would happen if there were two negotiating tables discussing the merger, one public and the other secret.
“If there is a second table where views are exchange and negotiations are occurring, it doesn’t do well for transparency,” he said.
Public statements from both Comcast and the Cuomo Administration did little to clear the air.
“It was an initial meeting to discuss the public interest benefits of the transaction for New York,” a Comcast representative said in a one-sentence statement in response to questions about the meeting.
Not exactly, says the Cuomo Administration.
“The meeting was to explain the new law, the PSC’s new powers and its expanded oversight,” Cuomo spokesman Richard Azzopardi said.
As has been the case during much of the merger debate, Time Warner Cable has remained silent and has refused to comment.
The governor himself has avoided taking sides, claiming he will abide by the recommendations made by the PSC. But if true, why involve the governor’s office in the merger or meet privately with either the PSC or the companies involved?
“The state is taking a hands-on review of this merger to ensure that New Yorkers benefit,” Cuomo said in May. “The Public Service Commission’s actions will help protect consumers by demanding company commitments to strong service quality, affordability, and availability.”
Cuomo himself has received at least $200,000 in campaign contributions from Comcast and Time Warner Cable. With customer satisfaction scores for both Comcast and Time Warner Cable in the basement, lobbying has been a necessity and Time Warner Cable is one of the state’s top lobbying forces, spending $500,000 of its subscribers’ money in New York in 2013 alone. Comcast spent $60,000, despite only serving a small sliver of customers in downstate New York.
New York Democratic candidate Zephyr Teachout is seeking to oust Gov. Andrew Cuomo in the fall election. One of the issues she is campaigning on is Cuomo’s significant contributions from Comcast and Time Warner Cable and his apparent lack of interest in stopping the merger. At a campaign stop in Syracuse, Teachout claims Comcast will raise your rates and offer no significant benefits to New Yorkers. She’d strongly oppose the merger and media consolidation in general, if elected. WRVO Radio reports. Aug. 29, 2014 (1:26)
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Teachout
Cuomo’s Democratic primary opponent Zephyr Teachout and her running mate, Tim Wu (who coined the term “Net Neutrality”) are less murky on the issue. Both strongly oppose the merger and cable industry consolidation generally and have expressed serious concern about the governor’s acceptance of hundreds of thousands of dollars in campaign contributions from both Time Warner Cable and Comcast.
“It’s a sharp contrast – between the hypocritical man in office taking money from corporate interests and the candidates with integrity who are funding their campaign through largely individual donors,” Letson writes.
“[Both Wu and Teachout] have said that they would work to block the frighteningComcast-Time Warnermerger, something that’s certainly on the minds of many New Yorkers,” says Letson. “What’s nice about that is that New York actually has a lot of power when it comes to this merger, so opposition from both the governor and lieutenant governor would go a long way.”
Letson is a Teachout campaign volunteer, so it is no surprise which candidate he supports.
Charter Communications, Inc. and Comcast Corporation today announced the name of the new cable company that will be spun off from Comcast upon completion of the Comcast – Time Warner Cable merger and the Comcast – Charter transactions.
The company now known as “SpinCo” or “Midwest Cable LLC” will be known as GreatLand Connections, Inc.
Although the name has been registered as a trademark, there is no known website or logo yet.
“We are pleased to publicly announce the name of this exciting new company we are building,” said Michael Willner, president and chief executive officer of GreatLand Connections. “The name GreatLand Connections pays homage to the rich history and striking geographies of the diverse communities in which the company will operate. It brings to mind our commitment to connecting people and businesses with terrific products and excellent service in the almost 1000 historic communities – large and small – across the 11 states we will serve.”
Former Insight Cable customers may recall Willner presided over that cable operator for years before it was acquired by Time Warner Cable.
GreatLand Connections will serve customers thrown out by Comcast and Time Warner Cable to keep their combined share of the cable television business under 30%. Most of the 2.5 million customers are in less desirable markets in the midwest and southeast.
It will likely launch as the country’s fifth largest cable operator, behind Charter Communications.
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