Discovery's David Zaslav Hurls Doubts at Comcast-Time Warner Cable

NEW YORK (TheStreet) -- Discovery Communications (DISCA) is not the first or even the largest media company to openly express doubts about whether federal regulators should allow Comcast (CMCSA) , the country's largest cable-TV operator and owner of NBC, to merge with Time Warner Cable (TWC)  , the second-largest cable-TV provider.

Discovery CEO David M. Zaslav on Wednesday in a presentation to investors at Goldman Sachs' Communacopia Conference in New York, played the parts of diplomat and advocate as he said that the merger would create a single company with outsized influence over the distribution of media contant.

"It presents some serious issues," Zaslav said, adding that Discovery officials have spoke with the Federal Communications Commission to air their concerns about the scale that a merged Comcast-time Warner Cable would create, and the power that such a combined entity would wield over the industry.. 

"It's going to be a long process; probably the summer of 2015, so we have plenty of time," he added. 

A combined Comcast-Time Warner Cable would put pressure on the rate of growth Discovery has been able to achieve over the last decade, both in its cable network channels and content distribution. Seven years ago, Discovery had less than 5% viewership share of the U.S. market. Zaslav said the current share is around 12% and that the company plans to expand to 15% in the short-term. 

Comcast-Time Warner Cable would own 17 of the top 20 markets, including NYC and LA, two markets critical to achieving scale in cable. 

Discovery is less susceptible to pressure from the proposed merger as some, having expanded its international operations most notably with its acquisition of SBS Nordic (now a part of European arm SBS Discovery Media) in April 2013. That business, notes Zaslav, is already ahead of plan in terms of cost synergies. 

As for future acquisition plans, Discovery said it is exploring M&A partnerships that would take advantage of a dual revenue share structure. "We will be opportunistic," said Zaslav. Dual revenue structure would give the company additional protection, rather than just taking a "big swing."

Zaslav confirmed Discovery had put forth a joint bid for U.K.'s Channel 5 with BSkyB earlier in the year, demonstrative of this approach. The offer was later withdrawn due to an unjustifiable cost and Viacom VIAB was able to secure the winning bid. 

--Written by Keris Alison Lahiff in New York. 

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