Charter and Cox logos. Charter and Cox logos.

The U.S. pay-TV landscape is set for a major shakeup. On Friday, Charter Communications and Cox Communications announced plans to merge in a $34.5 billion deal, with Charter buying Cox and the companies (which will take the Cox name) presenting their consumer-facing offerings under Charter’s Spectrum brand. If the deal goes through, that would make for the largest U.S. multichannel video programming distributor by far, and would have huge impacts on the cable landscape.

What could this deal (covering a mix of cash, stock, and debt) mean? Well, publicly-traded Charter reported 12.16 million cable subscribers in Q1, just ahead of Comcast’s 12.10 million, and 31.4 million customer relationships overall (also including internet and phone customers). It’s more difficult to get a recent estimate of privately-held Cox’s cable subscribers, but they cite 6.5 million total customers (including internet and phone customers, as well as commercial subscribers), and Letiman Research Group estimated they had 3.05 million cable subscribers in Q1 2023, the seventh-highest U.S. number.

Cox’s current number of cable subs is likely below that given continued cord-cutting. But it’s still significant, and would put this new company, which will be run by Charter well clear of Comcast in cable subs. And Cox is one of the largest potential targets out there on the cable side, ahead of Verizon, Altice, and Fubo (which Disney is still in the process of acquiring).

That’s before factoring in Cox’s internet and phone subscribers, both also vital in an increasingly-streaming universe. (And, on the internet side, this comes shortly after Charter bought Liberty Broadband.) This combination would give the united company a whole lot of market power, including on the carriage negotiation side when it comes to cable.

As such, there are certain to be plenty of objections to this merger. It’s notable that Disney’s Fubo acquisition is still facing an antitrust investigation from the Department of Justice, to say nothing of further regulatory scrutiny from the Federal Communications Commission. And while there are some complications on that side that a Charter-Cox tieup doesn’t have (discussions of Disney acquiring Fubo to resolve the Venu Sports lawsuit, plus Disney’s status as a content provider as well as a MVPD through their Hulu+Live TV service), Cox’s internet and phone businesses add its own unique dimensions. Given how vocal DirecTV and Dish in particular have been about their issues with the Fubo-Disney deal, it wouldn’t be surprising to see them (and others, including politicians who have bashed that deal) come out against this.

If the Charter-Cox move does indeed go through, that will make for a cable, internet, and phone giant. The resulting company would be led by Charter president and CEO Chris Winfrey and based out of their Stamford, Connecticut headquarters, but with a “significant presence” at Cox’s current Atlanta headquarters. And there would definitely be job cuts, with the companies’ joint release here saying “Charter also currently expects approximately $500 million of annualized cost synergies achieved within three years of close – stemming from typical procurement and overhead savings.”

Interestingly enough, this deal would lead to a company that’s big in those cable, internet, and phone dimensions without a significant programming and content side under their corporate umbrella. That’s a significant contrast to ABC and ESPN parent Disney and to NBC parent Comcast. Note that this proposed deal is only for Cox Communications, not the separate investments parent company Cox Enterprises has in things like Cox Media Group (local television stations) and Cox Automotive (automotive publications). And yes, Charter has interests in a variety of regional sports networks (including a 27 percent stake in SNY and 50 percent stakes in the Dodgers’ and Lakers’ Spectrum-branded RSNs) following their 2016 purchase of Time Warner Cable, but that’s quite a minor part of the company. This is largely a telecommunications company, based around cable, internet, and phone services, and they’d be tying up with another company focused on those areas.

The cable side here is a bet on the future of MVPD bundles. And while there’s some diversity in the companies’ phone and internet businesses (the latter of which can certainly still do fine in an era emphasizing direct-to-consumer streaming), pay TV would be a big focus here. Cox and Charter’s cable sides together certainly would have more power than either alone, and their combined phone and internet scale could also be attractive for bundling, but there are still questions about just how strong the cable model remains going forward.

It’s also worth noting that Charter in particular has been aggressive in carriage negotiations lately, including with a protracted 2023 carriage dispute with Disney. If this proposed combination with Cox winds up approved, that will give them even more negotiating power. And it will be interesting to see how they use that, especially given the growing uncertainty around the overall future of cable bundles. But the market certainly likes the idea of this combined company, with Charter’s stock seeing a major jump Friday morning.

About Andrew Bucholtz

Andrew Bucholtz has been covering sports media for Awful Announcing since 2012. He is also a staff writer for The Comeback. His previous work includes time at Yahoo! Sports Canada and Black Press.