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tmc8080
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| reply to dbmaven
Re: wishful thinking
said by dbmaven  :The answer is in the Newsday article - did you read it? The answer is NOT in the article, unless your hinting at the potential of a bidding war.. which is about as likely as the Unites States pulling out of Iraq tomorrow. The assets in question (if you've been keeping up) are JUST for the cable company.. not rainbow networks (channels), msg, nicks, and the kit-n-kaboodle.. just the cable system, customer base, hard cable assets (coax, head-ends, nodes, plant and regional offices) and rights of way and business broadband unit lightpath. When it comes down to it, there is a maximum price per subscriber a cable system is worth.. which is how cable companies are bought and sold.. (see adelphia meltdown) AND CABLEVISION ISN'T WORTH THAT MUCH.
Whoever ends up with cablevision will have to upgade to docsis 3 and to deal with a high footprint overlap of their competitor: Verizon. A company with DEEP pockets (despite crying poor when it comes to tv franchises). | |
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1 edit | The specific answers as to why the cable business is worth much more most certainly are in the article:
quote:
Cablevision is "going to generate a lot more cash than anybody ever imagined," Moffett said in an interview. "That being the case, it's worth a hell of a lot more than anybody thought."
...
Moffett said the company's revenues are soaring while capital expenses are dropping. The company said in its proxy that capital spending will fall from 14.6 percent of revenues this year to 6 percent of revenues by 2011.
When a business generates significantly more free cash flow than it has in the past, especially when capital spending will decline by more than half, there's significantly more "shareholder value" - even with the standard disclaimers about forward looking statements.
The DOCSIS 3 upgrades are already factored in to the capital plans (since they're projecting 3-4 years out).
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