Comcast-Time Warner Deal: Everybody's Got Something To Say

• by Wayne Friedman , Staff Writer, September 25, 2014

Critics and proponents are currently having their say about the proposed $45 billion Comcast-Time Warner Cable merger.

The issue for critics is that a bigger Comcast would put undue business pressure on cable networks and programming companies, large and small.  David Leavy, chief communications officer of Discovery Communications, is worried that Comcast would have massive leverage against Discovery, the last big independent cable network group. Discovery has said it has a legacy of “fair” business dealings with distributors.

In a statement, Leavy said: “Comcast chooses to not talk about the substantial program discounts they currently get or what they would do post-merger to demand extreme discounts from cable programmers or block the launch of new networks and brands.”

Comcast sees things differently: “As the self-proclaimed ‘[number one] pay-TV programmer in the world,’ Discovery does not need additional regulatory help to succeed in the marketplace. Its claims are baseless and should be rejected.”

Comcast says that Discovery and many other programmers are improperly using public comments against the merger to promote their own financial interests -- that they want to price concessions as a condition to support the merger.

Is it all about size and leverage? What is the appropriate size for a TV business -- or any business?

Merging the top two cable operators in the U.S. seems inappropriate for some. But what about factoring in satellite distributors (DirecTV is bigger than Comcast or Time Warner Cable) or non-Comcast broadcast operators?

What about the likes of Netflix? That company also has its worries.

Netflix said: “It is not extortion to demand that Comcast provide its own customers the broadband speeds they've paid for so they can enjoy Netflix. It is extortion when Comcast fails to provide its own customers the broadband speed they've paid for unless Netflix also pays a ransom.”

Comcast countered that Netflix’s 35 million customers would still be more than those served by a combined Comcast-Time Warner.

TV business millionaires whining about each other. And some concern over their customers. Does that message come across in these battles?