Drahi tells Wall Street he’d drastically cut employees and capex. New York City’s counsel Maya Wiley finds, “a number of important concerns” in an interview with Shalini Ramachandran Wiley adds, “Altice is talking about $900 million in synergies. Well, what’s getting cut? How’s that going to impact the economy of New York and quality of services? We certainly are not afraid to disapprove a transaction.”
Last month, I wrote, “Craig Moffett may have just killed the Altice-Cablevision Deal.” Craig wrote a devastating report that ripped into Altice’s finances. New York City will judge whether the deal is good for 1) jobs, 2) service levels, 3) prices, and 4) future investment in the network. My analysis is they fail all four.
The $900 million has to come out of an operating budget of $2.6 billion, almost certain to reduce service levels. It includes firing 900 people and cutting 25% from capex. They are paying $6,000/subscriber, requiring a profit of $40/month just to pay off the financing for the purchase. Cablevision’s net income over the last three years has been about $30/month. Their bonds are hard to sell. Altice could be facing bankruptcy if they don’t get large price increases. Cablevision is already highly leveraged, with $10B in debt, about $6,000/customer.