Time Warner, Comcast in Deal to Buy Adelphia

BlakeCaldwell writes "CNet reports that Time Warner and cable TV operator Comcast are set to pay $18 billion for bankrupt cable operator Adelphia Communications. The tentative deal, in cash and stock warrants, appears to beat off a potential rival bid by cable firm Cablevision Systems, which a separate source has said was preparing a $16.5 billion cash bid for Adelphia."

Comments

One big cable company?

[tinrobot]

The way we're headed in this country, there soon be only one company running all telecommunications.

Then it will merge with the one company that runs everything else.

Whatever happened to the Sherman anti-trust act?

Re:One big cable company?

[yintercept]

There is a very strong argument that the climate for the megamerger trend was set in the Reagan era. Likewise the momentum of the AT&T break started well before Reagan. The nasty truth about economics is that we rarely see the full effects of a policy during the administration that passed the policy.

I agree that Libertarians routinely shoot themselves in the foot on the monopoly issue. They fail to see that the break up of the companies that dominated the economic climate was a necessary step for their economic revolution.

Socialists are a bit more clever in this regards. Socialists support the consolidation of industry in a small number of hands while trying at every turn to fan envy and resentment toward the owners. Once the monopolies have a lock on the market, they can use the political capital of wealth envy to step in and take over.

Libertariens should be the first (and sometimes are) the first to support anti trust actions.

I'll tell ya'

[ImaLamer]

Whatever happened to the Sherman anti-trust act?

It was bought by the Telecommunications Act of 1996 to become Media0wns1

How do you go bankrupt

[Timesprout]

When you are valued at 16 - 18 billion, or was this just an executive 'lets force a sale so we get nice big payoffs' deal?

Re:How do you go bankrupt

[bigberk]

How do you go bankrupt when you are valued at 16-18 billion

Good question! Now I don't claim to be a business expert, but I do spend considerable time researching public companies as a hobby (why? lucrative). There are some measures thrown around for value of a company. Market or share capital is the amount of money the company has raised through sales of its shares on the stock market. Hence, large cap, small cap. The second measure is assets on balance sheet, which lets you say, omfg, citigroup has $1.5 trillion in assets!

Now what you never hear about from the media are other key ingredients, cash and debt. You don't hear them because they generally are not impressive and conducive to investing. Generally, you go bankrupt when you have too little cash and too much debt. It might have surprised some to hear that General Motors is at risk of bankruptcy. How can such a "huge" company have that problem? Well they had incredibly large debt, and overvalued assets. In comparison, many financial companies these days, while they have HUGE market capital and assets, also have tremendous debt, very little cash... and (icing on the cake) assets that are artifically too high and liabilities that are hidden off the balance sheet.

Adelphia

[Fade_to_Blah]

We have Adelphia here in Mass and I must say it has been pretty much rock solid since they announced their bankrupt. In fact, things actually improved after that. The cable internet has been nothing but great and the TV has been fine (though I am not too picky about TV as I dont watch it too often).

I have to say that Im not looking forward to this buyout....

As a current adelphia subscriber...

[Donjo]

... I see this as a good thing. I have never had comcast, but they always seem to get their new technology out the fastest when compared to the other cable companies, which I see as a good thing. What exactly don't people like about comcast?

Local fallout

[JSC]

The thing that worrys me about all this is what's going to happen to the local economy. I live about 20 miles from Adelphia's original home, Coudersport, PA. The buyout of Adelphia is probably going to result in the closing of all the local offices.

Until recently, Adelphia has been the big dog around here as employers go so the effect on the local job market is probably going to be pretty severe. 'course, we've been expecting it but now we get to see just how bad it's going to get.

Porn is wrong....

[SenatorOrrinHatch]

... but it sure seems to have helped Adelphia's market value!

For those that don't know, they stopped showing soft porn a while back for "moral" reasons. Recently they started peddling pay-per-view hardcore, and it seems to be a winning strategy.

I'd like to add that, in the 9 years since I've graduated high school, the first one of my classmates to become a self-made millionaire did it by making it easier for people to find porn online. Any comments?

So...

[FlyByPC]

I subscribe to Adelphia's cable-Internet service;

It looks like Time-Warner will buy Adelphia;

...Does this mean I'm gonna become an AOLer?!?
NOOOOOOO!!!!

Good Riddance Adelphia!

[bardothodal]

They are horrible where I live. Oversold broadband to the point where I actually uncapped my modem. The upload changed to whatever I wanted but the download speed never changed! 100 ms ping to the first second hop. Run ethereal and watch the garbage packets fly about! 5%-12% packetloss for over a year. They actually made Verizon look good. The cable tv is just crap too. the lower channels have so much attentuation the are in the constant state of static. My sisters digital cable goes out constantly. They told me at the local office the wait for HDTV programming was 3 years away! I have to d/l programming from Usenet to get an HDTV quality tv show that I can already watch in substandard definition . So sad. They suck. But don't take my world for it , go browse DSL Reports for 6 years of horror stories.

Great idea.

[Renraku]

Where I am in east TN, it used to be just Comcast offering cable and cable internet services. As a result, their internet service was like $70/mo, and their cable TV was way overpriced.

Since several more cable providers have moved into the area, they all have roughly the same price, which is around $30-40 for internet service.

Now what could POSSIBLY warrant a $30/month drop in price for Comcast? Competition, maybe?

What do you think would happen if gas had a competitor? What if electric cars rivaled gas-powered cars for efficiency/ease-of-use? You're damn right gas prices wouldn't be so high. As of now, gas companies can make any excuse they want to jack prices. "Well, this week I have to pay for my new yacht, so I'm going to jack the prices $.04 a gallon. And everyone else will too, because they'll feel that they aren't getting as good a profit. There'll be the ones that only jack theirs $.03 a gallon, but we have enough loyal customers to ensure that I can buy 3 more yachts by tommorow."

As an Adelphia Employee

[d3ac0n]

All I know is that I'm not too excited about this. I work in upper level tech support for the High speed internet division here in Buffalo NY. Let me tell you, this last year since the bankruptcy was announced haven't been pretty. With all the uncertainty surrounding the bankruptcy we have been hemorraging people like crazy. Most of our best talent has bailed for other companies and/or other states. It's only within the last 3 months that things have really begun to improve as many long needed network upgrades have taken place, and we FINALLY got some more people here at level 2 support to help with the call load.

If this deal is indeed final (no offical word from the courts yet), I suspect that the talent bleed will begin anew since we will probably only have about 6 more months of employment at that point. The worst part about it is that the economy is so poor in the Buffalo area (despite having more IT infrastructure in place than many IT 'capitols' like Austin Texas) That for many of us, getting work in IT will be next to impossible locally. This means that we will have to try and sell our houses in a sinking housing market and make a jump to another area of the country. Alternately, we could make a bid for Self-Employment in one of the most business unfriendly states in the union, or up and quit the IT field altogether and start a new carreer in a new field. Frankly, I'm not excited about any of those prospects. Working for myself is by far the most enticing, but trying to create a sucessful small business in this state is alot like trying to "chop down the greatest tree in the forest with a herring." In other words, darn near impossible. At any rate, it's gonna be ugly. Darn ugly. I suspect that I will probably ride it out to the end, as we will probably be receiving good severance packages. But I would imagine that many others will be leaving as soon as they are able to get other work. Wish us all luck. we're gonna need it.

BTW, I will probably be commenting more about this in my blog http://www.wearyman.blogspot.com/ feel free to stop by. Just don't expect any real insider info. I won't be putting my severance package at risk just for a blog post!

Of course!!!!

[goon america]

I've said it before, I'll say it again -- modern corporations are just too damn small!