Altice-Cablevision deal hits bumps
New York city officials -- and Wall Street investors -- are raising serious questions about the proposed purchase of New York-based Cablevision by Amsterdam-based Altice. Mayor Bill de Blasio’s top legal counsel Maya Wiley says the city won’t hesitate to block the $10 billion deal if the city concludes that Altice doesn’t have the financial resources to provide quality service, good jobs, and invest in the network. Wiley told the Wall Street Journal:
Altice is talking about $900 million in synergies. Well, what’s getting cut? How’s that going to impact the economy of New York and quality of services? We certainly are not afraid to disapprove a transaction.
In aninterview with CNBC, Wiley emphasized that it’s in the city’s interest for its franchisees to succeed, but not at the expense of customer service and good jobs that grow the economy:
It’s incredibly important to understand what the job picture looks like. You know, these franchises are very important to our economy. Jobs are important to our economy. We want [franchisees] to be successful as an economic power… But we won’t ensure their success to the detriment of our residents. That actually is not the role of government.
Regulatory concerns over the deal have reverberated on Wall Street. Altice’s stock declined 50 percent since September, and it’s trading nine percent below the agreed sale prices. As cable analyst Craig Moffet told the Wall Street Journal:
The spread has widened in large part because people have become increasingly concerned that neither the city nor the state will find that the transaction is in the public interest, or alternatively, they’ll demand so much in terms of givebacks that ultimately the deal won’t be palatable to Altice.
In addition to New York City, state regulators in New York, Connecticut, and New Jersey, as well as the Federal Communications Commission, must approve the proposed deal. If approved, the deal would create the fourth largest cable operator in the United States, only slightly behind Cox.
Earlier in December, the Communications Workers of America (CWA), which represents 300 Cablevision employees, filed objections to the deal at the FCC. “Altice takes on too much debt, outsources as much work as possible and then downsizes its workforce,” said Dennis Trainor, Vice President of CWA District 1. “Customers get worse service and employees lose their job. Unless Altice makes commitments to protect customer service and Cablevision employees, the FCC should reject this deal.”
NYC calls out cable deal (Yahoo! Finance, Dec. 24, 2015)
Cable Deal Hits New Bumps (Wall Street Journal, Dec. 22, 2015)
CWA files objections to Altice-Cablevision deal (Speed Matters, Dec. 7, 2015)
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