Summary
This article is important because the two predominant players have established a precedent of relying on acquisitions to continue growing at such a substantial rate.
Analysis
Sales of the triple play are great but acquisition of homes is the name of the game. For TimeWarner especially, the NY systems are extremely valuable. The Dolans have been innovators in the space from both the content and technology points of view but they have not been easy to deal with and should they go private, coupled with TimeWarners recent acquisition of Adelphia's Western New York systems, there is a high probability you will see aggressive negotiations around content, especially as it relates to the MSG network and their sports offerings. A highly leveraged company, as the private cablevision will be, coupled with significant legal problems, should TimeWarner not wish to grant the subscriber rate increases the Dolan’s will want/need (especially in Upstate New York – where TimeWarner controls the systems but MSG just promised the Buffalo Sabres a 10 year deal however, they effectively have not paid a dollar on it as they inherited a fully funded contract from Adelphia) could equal significant challenges in the future. Those challenges could force a sale of assets. Either way the Dolan’s win financially and most likely TimeWarner will get the systems.
