Comcast, the largest cable company by market cap, is buying it's largest competitor.
Comcast (CMCSA) is the largest cable provider in the country. Now it's buying the second largest company by market cap, Time Warner Cable (TWC).
Usually a mega-merger like this is unsettling for consumers. Without options, without competition, what's to prevent the providers of basic (if not essential) services like cable and broadband from jacking up their prices to unreasonable levels? The question is almost certain to be asked by federal regulators, who place limits on mergers and acquisitions for this very reason.
However, there's a good chance the move may benefit consumers. Right now, the balance of power tilts slightly in the favor of content providers like Disney (DIS), who charge cable companies basically whatever they want for certain channels. The most expensive channel is ESPN, which costs almost $5 per consumer, even if the consumer doesn't want it. This is the major reason why your cable bill is so high.
Comcast and Time Warner insist that the merger will give them the leverage they need to negotiate better prices for content, which will help keep prices low.
But there's a good chance the exact opposite could happen. Politico is reporting that some regulators in Washington are already livid about the deal. They say that to merge the two largest players in an industry where prices have already been going up for years should be "unthinkable."
Taken together, you have a recipe for what could be one of the most scrutinized acquisitions of all time - as concerns over anti-trust practices, net neutrality, and the re-shaping of content delivery collide. We built a list of some of the major players in the industry to see how stocks might be affected by the merger. As of 1PM EST, Time Warner's share price was almost 7%.
Click on the interactive chart to view data over time.
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1. Comcast Corporation (CMCSA, Earnings, Analysts, Financials): Provides entertainment, information, and communications products and services in the United States and internationally. Market cap at $146.24B, most recent closing price at $55.24.
2. Time Warner Cable Inc. (TWC, Earnings, Analysts, Financials): Operates as a cable operator in the United States. Market cap at $40.26B, most recent closing price at $135.31.
3. Time Warner Cable Inc. (CHTR, Earnings, Analysts, Financials): Provides digital television entertainment in the United States and Latin America. Market cap at $37.98B, most recent closing price at $71.44.
4. Time Warner Cable Inc. (DTV, Earnings, Analysts, Financials): Provides digital television entertainment in the United States and Latin America. Market cap at $37.98B, most recent closing price at $71.44.
5. Dish Network Corp. (DISH, Earnings, Analysts, Financials): Provides direct broadcast satellite (DBS) subscription television services in the United States. Market cap at $26.75B, most recent closing price at $57.51.
(List compiled by James Dennin. Market cap sourced from Zacks Investment Research, all other data sourced from Yahoo! Finance.)
Analyze These Ideas: Getting StartedRead descriptions for all companies mentioned Access a performance overview for all stocks in the list Compare analyst ratings for the companies mentioned Compare analyst ratings to annual returns for stocks mentioned Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, FilingsComcast Corporation(CMCSA, Chart, Download SEC Filings) Time Warner Cable Inc.(TWC, Chart, Download SEC Filings) Charter Communications Inc.(CHTR, Chart, Download SEC Filings) DIRECTV, Inc.(DTV, Chart, Download SEC Filings) Dish Network Corp.(DISH, Chart, Download SEC Filings)
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