European telecommunications giant Altice’s deal to purchase Bethpage-based Cablevision Systems Corp. for $17 billion including debt raises serious questions about what the acquisition means for Cablevision’s virtual monopoly on Long Island local news.
If regulators approve the sale, which is scheduled to close next year, Altice will also take over Cablevision’s media assets: Newsday, LI’s lone daily newspaper; amNew York, a free New York City daily; and seven News12 hyperlocal cable news channels covering the tristate area, including their flagship station on the Island.
“We were very focused on keeping control and ownership of…the media assets, which have been loss-making historically, but are extremely attractive as far as being a part of the fiber of the local community,” Altice Chief Executive Officer Dexter Goei said on a conference call Wednesday.
Altice’s deal with Cablevision, the nation’s fifth-largest cable company with 3.1 million subscribers, combined with Altice’s $6 billion acquisition earlier this year of St. Louis-based Suddenlink Communications, the seventh-largest cable provider in the country, would make it the fourth-largest cable operator.
The announcement comes amid an American media consolidation frenzy this year, with Charter Communications, the nation’s third-largest cable company, purchasing Time Warner Cable, the second largest, and AT&T buying DirecTV, the satellite television company.
Cablevision CEO James Dolan issued a statement early Thursday morning calling Altrice “truly worthy successors.” He also noted that the Dolan family will still own their spunoff companies, Madison Square Garden, the New York Knicks basketball team, the New York Rangers hockey team and AMC Networks, the cable channel company.
“We expect that Cablevision will be in excellent hands,” Dolan said of the company that his father, Charles, founded 42 years ago. “We look forward to doing all we can to affect this transition for our customers and employees.”
At one point in the negotiations, the Dolans had resisted selling their media properties as a part of the Cablevision deal, but Altice insisted on including them, The New York Times reported. Cablevision bought Newsday for $632 million seven years ago from the Tribune Company, based in Chicago.
The acquisitions would not be the first foray into print media for Altice, which is owned by the French-Israeli billionaire Patrick Drahi, whom The New York Times described as “a ruthlessly efficient operator who runs a lean business.” Altice Media Group owns about 20 newspapers and magazines in France. Asked during the conference call if Altice planned to sell off Newsday, News12 and amNewYork, Goei said that is not their intention.
“We find those businesses to be extremely attractive and a core part of the local community that we would like to continue to invest in and hopefully learn from in many respects,” he said. “We think that we can run those businesses a little bit more efficiently over time, but I think it’s about continuing to invest in the quality content, both on the Newsday side and as well as the News12 side.”
Goei noted that Altice found the media assets’ $200 million in annual ad sales “very impressive” despite the $350 million in operating costs. He added that he believes Altice can consolidate the corporate offices of the news outlets without compromising the quality of the news coverage.
“A lot of the losses are being generated by an allocation of corporate overhead,” he said. “You can expect us to try and manage those allocations a lot tighter going forward.”
The Altice CEO also praised Cablevision’s controversial ownership of Newsday and said the new owner would not interfere with the newsrooms.
“We have a huge amount of respect for what the Dolan family has done with those businesses,” he said. “We won’t touch anything to do with editorial content, but we obviously will look to optimize on the losses…There’s a lot of things like duplicative finance staff.”
Jaci Clement, executive director of the Bethpage-based Fair Media Council, a local media watchdog group, said that while Goei may be saying all the right things now, only time will tell if Altice will tinker with the news coverage or not.
“It’s too early to tell about anything,” she said. “Based on the way this has worked with other companies…you’re probably talking about a year before any changes take place…They want to formulate their own game plan and figure out what their idea of success is.”
At Newsday‘s Melville office Wednesday night as news of the Cablevision sale was spreading through the building, staff in the composing room were reportedly joking about learning French.
-With additional reporting by Desiree D’iorio and Spencer Rumsey.