The further consolidation of mass media in the U.S. has apparently ended today, as a proposal by Comcast Corporation (NASDAQ:CMCSA) to acquire Time Warner Inc (NYSE:TWX) and Time Warner Cable Inc (NYSE:TWC) appears to have fallen flat. There were many reservations about the deal from government as well as from Time Warner, according to a CNN report today.
DoJ and FCC take time view of Comcast plans
Despite predictions by Comcast as early last week that the deal would go through, Bloomberg reported earlier that staff attorneys at the U.S. Justice Department’s antitrust division are nearing a recommendation to block Comcast’s $45 billion takeover of distribution rival Time Warner. Bloomberg is also reporting today that Comcast is planning to walk away from the deal, citing people with knowledge of the matter. A formal announcement is expected Friday.
Comcast is the top provider of cable TV and broadband access in the United States with over 20 million subscribers, while Time Warner Cable has 11 million subscribers, the most significant of which are in New York and Los Angeles. Reports had identified these markets as significant to Comcast’s motivations.Bloomberg reports that this week lawyers at the U.S. Federal Communications Commission Justice Department both opposed the planned transaction, saying the merger didn’t help consumers, a person with knowledge of the matter was quoted as saying.
After meetings with government officials, participants referring to Comcast deal in past tense
The collapse of merger talks came one day after meetings between the cable companies and government officials. According to a CNN report, participants in the talks are now talking about the deal using the past tense, and people associated with the deal were going through “the five stages of grief” after Wednesday’s meetings.
“No, the Comcast deal isn’t dead yet,” MoffettNathanson senior analyst Craig Moffett was quoted in the CNN report as saying. “But it’s a bit like an elephant that has been dropped out of an airplane. At around 10,000 feet, it is technically still alive. But it is falling fast, there’s not much you can do to stop it, and its odds of survival are pretty low when it hits the ground.”
According to CNN, a Time Warner Company, Comcast’s competitors are privately celebrating, as 21st Century Fox and Time Warner “had concerns about the merger but rarely said so publicly.”