How TWC Went From Flailing Business To $60 Billion Merger

Time Warner Cable TV Guide
Time Warner Merger

When Chief Executive Rob Marcus took on management in 2013, Time Warner Cable was already having it rough going from a lot of reasons. The recent deal with Charter Communications Inc. is the culmination of a recovery strategy for a series of issues TWC had been facing for some time, including loss of subscribers, takeover approaches by Charter, and an unsuccessful battle with CBS. Marcus recalls, “The outside world was calling us losers.”

In the face of myriad operational issues the company was facing, Marcus steered it through a turnaround despite the fact of the field merger with Comcast. These efforts led to the $60 billion sale Charter last month, and turned out a good deal for stakeholders who had stayed with the company since it came into being in 2009, as a spinoff from Time Warner Inc.

All over, cable companies are faring better against phone and satellite rivals, and the cord-cutting trend definitely has some friction to contend with. Still, things may not be smooth for the new merger company comprising Charter, Time Warner Cable and Bright House Networks.

For one, there is going to be a huge scale integration of the three companies. Other than that, they will also need to beat “skinny bundle” offerings from online streaming services, which currently use little more than an internet connection to bring video service to subscribers.

Charter Acquires TWC

In an annual trade show interview, Marcus stated that in his opinion, skinny TV bundles and online video services will drive innovation in the way cable operators do business, and that the big bundle won’t be getting chucked anytime soon. However, with TV networks like HBO giving services directly to consumers, he said, “it is inevitable that will have an impact on distribution through the traditional channels.”

Even before the merger with Charter, Marcus brought a bunch of senior executives and boosted capital spending. This may have turned out to be a foolish move if not for the failed deal with Comcast, and TWC subsequently pricing themselves higher in the deal with Charter. Meanwhile, Charter has plans to retire the TWC name and in its stead, bring in the “Spectrum” brand name.

For now, TWC and Bright House Networks will keep servicing existing customers with their suite of advanced products and services in respective markets. Over the upcoming months, spectrum products and services will be brought out to the TWC and Bright House Networks areas, with customers of both companies getting to choose new services.

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