Recently, a story on a PR web-site discussed whether the pending merger of Cablevision/Altice would lower prices to subscribers. As the site noted, a merger would mean that the Dolan family won’t be paying themselves absurd amounts of money as so-called Cablevision employees, Cablevision’s debt could be lowered substantially and Altice has a past record of running a tight financial ship.
Sounds great. Except, there is still little to no evidence that customers will see a single bit of financial help from this deal. None. Why?
First, although Altice runs a much better company than Cablevision, they still have a LARGE amount of debt that will only get bigger if their Cablevision purchase is approved. As the Financial Times recently noted:
However, some investors and others who follow the company closely questioned whether Altice was loading too much debt on to Cablevision to finance the deal … traditionally Altice has borrowed at lower rates. – Financial Times
Again, nobody is saying that Altice will be burdened by a huge amounts of debt that will drag down the company. Simply put, if the merger is approved, Altice still has a significant need to bring in as much revenue as possible, as quickly as possible.
Second, the price of TV is continuing to increase at a ridiculous and frankly unsustainable level. As Variety recently noted, the potential merger between Altice/Cablevision signaled that “consolidation among the programmers” would get continue to accelerate. Meaning, companies will continue to buy each other out…..continue to jack up prices on their programming….and consumer bills will still be therefore continue to be jacked up as well.
Then there is the fact that Altice will be given Cablevision’s position as the lone provider in many parts of the country. Why would Altice make the prices any lower when there is no reason to do so? As we have written about in the past, Cablevision has made sure to do everything they can so that they are the only provider in all areas that they service.
Lastly, since when has a telecom merger brought customers any actual savings? Anyone remember the “significant consumer savings” that Cablevision was going to bring its customers after it spent $1.3 billion purchasing Bresnan Communications in 2010? Will Cablevision ever get around to issuing those savings to customers?