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.
3. More opportunities to offer better tiered packages to subscribers. If the combined company could offer more services under one specific package tier, it becomes an easier sell to charge subscribers a higher monthly rate. The company earns more money.
4. Time Warner would instantly gain access to Comcast's years of aggressive investments in infrastructure and set-top boxes. In 2013, Time Warner increased its capital expenditure by only 3.3%, Comcast ... 9.8%.
However, in large deals such as these, the not-so-visible aspects and angles tend to drive the greatest value over time. Here are four to have handy on this combination:
Comcast/TWC own 30% of the SNY Network (the New York Mets network). So bringing that ownership in house puts them in a better position for advertising and programming across platforms, and perhaps making some form of bid for the Mets. Comcast also owns, through an affiliate, a stake in SportsNet LA, which will run the 2014 Dodgers baseball season. Now the company could distribute that content in more places.