Charter CEO Signals Interest in Further Acquisitions
CEO Tom Rutledge also discusses a la carte pay TV pricing at an investor conference
Charter Communications would benefit from potential further cable acquisitions, CEO Tom Rutledge said in New York on Monday.
Speaking at the UBS Global Media and Communications Conference, he was asked about the company's plan to acquire part of Time Warner Cable from Comcast when the big cable deal closes.
"We get scale," Rutledge said in explaining the benefits of the deal. Quipping that last year at the same conference, he got "chased" out of the hotel when he wanted to buy TWC as a whole, he said he was happy that "we got a nice chunk of it in a very nice footprint." Adding that the financials also work, he concluded: "It’s a very good deal from Charter’s perspective."
Rutledge said that Charter will get a management fee for running the assets and said the company can use mass media more efficiently after the deal.
Asked if there are other cable systems that he and his team would be interested in acquiring, Rutledge said: "There are other assets out there" that would bring financial and strategic benefits, he said. But he didn't go into specifics on the assets the company could be interested in and how keen he was on growing further. The Comcast deal will make Charter the country's second-largest cable operator.
Charter, in which John Malone's Liberty Broadband owns a big stake, has seen positive subscriber momentum, the CEO also emphasized on Monday. He said he has hired 6,000 people at Charter in the last couple of years since he became CEO.
Asked if he believes in limited network bundles for economically sensitive consumers, Rutledge suggested a bundle without sports could be interesting. Discussing continuing increases in programming costs, he said cable operators can always choose not to carry networks that cost too much for the number of viewers they attract.
Rutledge also signaled that a la carte pricing of pay TV services, meaning that networks would be sold individually rather than in a bundle, would put the whole industry at risk. If everything was sold a la carte now, a $70 billion ecosystem would turn into a $7 billion ecosystem, he said.
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