Bright House Networks Is the Darling of Cable TV. But Why?

NEW YORK (TheStreet) -- For a cable TV provider with about 2.5 million subscribers, including customers in California, Florida and Michigan, Bright House Networks might as well be Lebron James during free agency. Everyone wants it.

Charter Communications (CHTR) was all set to acquire privately-held Bright House, the country's sixth-largest cable-TV provider, before Comcast's (CMCSA) merger deal with Time Warner Cable (TWC) failed to win fast approval from government regulators, putting that agreement in jeopardy. Since then Time Warner Cable has reached out to Bright House for a deal and Comcast has also been mentioned as a possible acquirer, according to The Wall Street Journal.

And according to a Reuters report, Bright House plans to jettison a  $10.4 billion deal to be acquired by Charter, citing people familiar with the matter. Charter's earlier merger agreement with Bright House included a 30-day provision allowing for the two companies to renegotiate a deal if the Comcast-Time Warner Cable merger failed to close.

So, what does Bright House have that everyone wants? In a word: customers.

Charter, Comcast and Time Warner Cable are all trying to grow through acquisitions. Increasing revenue isn't as easy as it used to be. The number of video subscribers is either going down or standing still. Future growth will come through broadband services and increased video offerings, and Bright House has customers.

"I don't know that it's about what's so appealing about Bright House as it is about the challenges that the major players in the cable space are all wrestling with at the moment," Steve Beck, managing partner at management consultancy cg42, said in a phone interview on Thursday. He cited challenges such as brand and customer vulnerability being at all-time highs, an erosion in the number of video subscriptions, and operators' negotiating power over content becoming increasingly weakened.

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