Constitution CEO Chris Winfrey Addresses “Chatter” About Potential Blockbuster Merger With Comcast

Constitution CEO Chris Winfrey acknowledged the “chatter” within the media enterprise and on Wall Avenue a few potential merger with Comcast, however mentioned such a megadeal just isn’t “core” to his firm’s technique.

Throughout a convention name with analysts to debate Constitution’s better-than-expected fourth-quarter outcomes, Winfrey was requested straight a few Comcast tie-up and his view of M&A extra broadly. The highest exec didn’t utterly rule out dealmaking, however mentioned closing a transaction with one other main participant received’t essentially be any simpler through the Donald Trump administration.

“I do know there’s quite a lot of chatter on the market” about Comcast, Winfrey mentioned. However Constitution’s technique, he continued, “has by no means been depending on M&A. The truth is, it’s actually been shifting purely from an natural development perspective, and the way can we create worth for shareholders from that perspective? You do this by being an excellent operator. You do this by saving clients numerous cash, offering nice service.”

Analysts at Wall Avenue agency TD Cowen & Co. this month promoted the mixture in a word to shoppers. “We imagine a Comcast/Constitution merger may make industrial logical sense given the dimensions and subsequent huge synergies,” they wrote. The 2 firms already take part in a three way partnership on connected-TV service Xumo.

Main Constitution shareholder John Malone has advocated for trade consolidation, saying regulators have allowed the tech trade to “run wild” whereas handcuffing conventional sectors like cable. “Constitution needs to be allowed to merge with Comcast or Cox or anyone, to cut back prices and enhance high quality of the service they supply,” he mentioned at Liberty Media’s investor assembly final November.

Working a enterprise nicely, Winfrey acknowledged, “opens acquisition alternatives over time.” Nonetheless, he mentioned combining with a large-scale peer received’t be as simple because it was a decade in the past when Constitution purchased Time Warner Cable, vaulting to the highest of the market-share charts. “The remainder of the cable trade, when you sit again and give it some thought, it’s all family-owned or family-controlled,” he mentioned. “So, it’s within the fingers of those households or family-controlled companies that get to resolve when’s the time that they’d like to mix.”

Cable tv started as an trade led by maverick entrepreneurs like Malone, Charles Dolan, John Rigas and Comcast founder Ralph Roberts creating what would change into multi-generational empires. Roberts’ son, Brian Roberts, is CEO of the media big that started off as a small, regional cable outfit.

Past the household management component, Winfrey mentioned, is the difficult matter of regulatory overview. Constitution and Comcast are the highest two pay-TV operators within the U.S., however their footprints are steadily shrinking as a result of cord-cutting. An analogous mixture of main distributors – satellite tv for pc operators DirecTV and Dish – fell aside final November when collectors of Dish dad or mum EchoStar objected to phrases of the proposed merger.

Whereas the Constitution-connected CEO of Warner Bros. Discovery, David Zaslav, and different media bosses have predicted a surge of M&A underneath Trump, Winfrey just isn’t satisfied.

“The door for M&A, there’s additionally quite a lot of chatter that it’s extensive open,” the exec mentioned. “However I don’t assume it’s wide-open. I feel any M&A transaction that you just do underneath any administration must be good for patrons, must be good for jobs. And once you consider our natural working technique that drives development, that’s been useful in that respect up to now with our means to get issues finished. However it’s a possible add-on to our technique, but it surely’s not the core of our technique and it’s not the one method that we are able to create worth.”