• by Wayne Friedman , Staff Writer, February 28, 2024

The effects of cord-cutting and linear TV results trending down continue to fuel merger talk with regard to legacy TV network groups (and their stations). 

But what about legacy pay TV distributors -- companies that traditional TV network companies have done business with for decades in securing billions in retransmission and carriage fee revenues for their TV networks and TV stations? 

Despite a sharper downturn in results beginning about ten years ago, legacy pay TV distributors did not seem to be overly concerned about cord-cutting, declining video subscribers and revenue and everything else in between.

Why? Because the U.S. broadband business was booming -- as well as a budding mobile phone business.

Now, the landscape for broadband isn't looking so good. While revenues are not declining, here and there some companies have seen small, slight declines in broadband customers.

Perhaps the focus was always on those long-time veteran cable operators --  Comcast, Charter, and Cox. And to be fair, there was always consolidation talk -- even currently -- about DirecTV and Dish Network.

It turns out we have been missing a key piece: those small to mid-sized original cable operators such as Altice USA (formerly Cablevision Systems and Suddenlink) may need a helping hand 

Rumors abound this week that Altice is in talks with Charter Communications about a possible merger deal.

Altice stock spiked nearly 40% in mid-day Tuesday trading. Altice USA has lost more than 92% of its stock price since 2017.

Altice has 5 million subscribers in 21 markets -- mostly in the New York City metro areas and suburbs, as well as in Houston/Dallas and part of Louisiana.

Charter has 14.1 million subscribers, while Altice has 5 million.

This means Charter would be the dominant U.S. pay TV distributor -- surging ahead of Comcast, which currently has around the same number of subscribers as Charter.

Laurent Yoon, media analyst of Bernstein Research, says the merger would create the largest broadband provider in the country with 33 million subscribers -- 3 million more than Comcast.

The effects of cord-cutting? Experts say it started in 2007, almost two decades ago. We are finally now in the thick of things, with some traditional cable operators looking to write the last chapter of their story.