Oftentimes in giant deals, when people list reasons why a combination makes sense, the obvious gets the most attention. In the case of the Comcast/Time Warner marriage, the four obvious reasons include:
1. More subscribers layered on top of a consolidated business should equal higher profits.
VZ). It is essential for them to be positioned in these markets, as they provide consistent revenue, and it's where the most growth is -- not with large businesses that continue to cut. ? This marriage is very much a bet on the connected home and car. Comcast/Time Warner wants to be the go-to Internet and video solution for a consumer who is connected everywhere, and more so in the future. (Can you imagine an NBC sporting event on an iWatch in a former Time Warner market? I could.) ? The CEO of Comcast, Brian L. Roberts, is a proven value creator, offering certainty of value to shareholders who are uncertain on Time Warner's future, as their company continues to grow quite slowly. Consider this crazy stat: Since Roberts assumed the role of president at Comcast in 1990, the stock has risen 1,467%, compared with the Nasdaq's gain of 864%. Over the past five years, Comcast's shares have risen 330%, compared with 155% for Time Warner. For cable operators in an era of growing mobile consumption that lowers prices for so many goods and services, their only option is put their egos aside and combine forces. Regulatory Concerns I believe we will see the typical antitrust issues and regulators (the Justice Department and the Federal Communications Commission) snooping around. But when you drill into the heart of the deal, the markets in which they operate don't appear to overlap, and Time Warner could really use Comcast's better technology. The squishy point for them to overcome is whether their combination will give them serious influence with networks, advertisers and even Apple, Hulu and Netflix, where their programming is distributed (and increasingly so, given estimates for mobile growth over the next 10 years), and whether it will give them sway over consumers via broadband services.
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