According to a report from Reuters, Time Warner Cable and Cox Communications have been discussing the possibility of improving their respective cable holdings through strategic swaps, and – with the Comcast/NBCU merger in mind – perhaps taking their dealings to a deeper level.
The early talks have focused on systems in Southern California, in the Los Angeles and San Diego areas. The idea would be to swap so each company winds up owning and operating adjacent systems, a much more cost-effective way to operate than the current situation where the two are operating next door to one another without backroom synergies.
Reuters went on to cite Wall Street rumors that a more permanent relationship may be on the table, although neither company has made any such indication. TW has just over 13M subscribers, and the acquisition of Cox would take it near 20M, bringing the merged entity closer to industry leader Comcast’s 23M+ subscriber total.
RBR-TVBR observation: Every time there is a major deal, anti-consolidation regulators and legislators warn that it will set off a merger chain reaction – it’s the domino theory of media mergers. This sort of story is sure to fuel that fire once again.
