When 2015 began, there was a large dark cloud hanging over the country. As some people would say that we have bigger issues to deal with, there is no bigger issue than a monopoly of a commodity. Our country was founded on breaking up big monopolies and in recent years it seemed like there was no end in sight, at least for the people that have to bear the burden of these mergers. It seems that the United States government, after the issue of net neutrality, saw that we finally had enough of these big mergers. The dreaded Comcast/Time Warner merger is over.
“Today, we move on. Of course, we would have liked to bring our great products to new cities, but we structured this deal so that if the government didn’t agree, we could walk away,” Comcast CEO Brian Roberts said in the company’s statement. “Comcast NBCUniversal is a unique company with strong momentum. Throughout this entire process, our employees have kept their eye on the ball and we have had fantastic operating results. I want to thank them and the employees of Time Warner Cable for their tireless efforts. I couldn’t be more proud of this company and I am truly excited for what’s next.”
Earlier this week, it was reported that the Federal Communication Commission and the Justice Department were too concerned about the possibility that Comcast would not keep their end of the deal, as they did with the whole Hulu deal after they purchased NBCUniversal.
FCC Chairman Tom Wheeler issued a statement saying that preventing the merger “is in the best interests of consumers. The proposed transaction would have created a company with the most broadband and video subscribers in the nation alongside the ownership of significant programming interests.”
Time Warner Cable emailed a statement to all their employees on Friday, which came off as more of a pep rally than admitting defeat:
I wanted to tell you personally that, moments ago, we formally and mutually agreed with Comcast to terminate our planned merger. I’m disappointed we were unable to consummate the deal, which we believed would have created great value for customers, colleagues and shareholders alike.
But I’m also incredibly excited about our future.
When I began my tenure as CEO in January 2014, I committed to three things: making TWC a truly great company, delivering outstanding customer experiences, and maximizing shareholder value. I remain equally committed to those same three goals today. I am proud to say that during the past 16 months, we have greatly improved our Company’s operating results and the quality of our customers’ experiences. Those, in turn, are the essential underpinnings of long-term shareholder value. Today we are well positioned, thanks in part to the substantial investments we have made in our network and customer service, but most of all due to your hard work.
So now what happens? We continue to do what we do best: working together to serve every one of our 15 million customers better every day. We continue to invest to make our network and our products even more competitive. And we continue our commitment to making Time Warner Cable a great place to work for our 55,000 employees.
I am truly sorry for how the uncertainty of the past 14 months has affected each of you – I know it’s been difficult to make decisions about your careers and your lives. There will likely be some continued distractions in the coming weeks as we adjust to our new normal. However, you’ve already demonstrated a remarkable ability to serve our customers well and deliver results through it all.
Now is our time. Together, we will continue to prove that Time Warner Cable can and will create value for our customers, shareholders, each other, and the communities we serve. I’m proud to stand alongside you and lead the way forward.
Now this deal-killer does not only affect Time Warner Cable and Comcast. It manages to change the plans of Charter Cable, who was expecting to get some of the customers that either side would have to shed when the deal was approved, as well as looking into buying Bright House Networks. That potential deal was contingent on the fact that Time Warner would merge with Comcast. However, it is not all too painful. Comcast squared a deal that if the deal was not approved, they would walk away without any payout, unlike the botched deal between AT&T and T-Mobile.
Does this prevent mergers from happening again? Not likely. However, it will be a long while before we see any behemoth try to pick off another major carrier. After the AT&T and T-Mobile deal, we have not seen many companies trying to pick each other off. Time Warner may look for someone smaller but Comcast will mostly stay out of it.
Let us know what you think about the outcome in the comments below. Also, you can read the full statement from FCC Chairman Tom Wheeler below:
“Comcast and Time Warner Cable’s decision to end Comcast’s proposed acquisition of Time Warner Cable is in the best interests of consumers. The proposed transaction would have created a company with the most broadband and the video subscribers in the nation alongside the ownership of significant programming interests.
Today, an online video market is emerging that offers new business models and greater consumer choice. The proposed merger would have posed an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers.
I am especially proud of our close working relationship throughout the review process with the Antitrust Division of the Department of Justice. Our collaboration provided both agencies with a deeper understanding of the important issues of innovation and competition that the proposed transaction raised.”