Mosley Executive Summary Comcast Aquistion

Media Giants Join Forces: Comcast & Time Warner Cable Merger

Executive Summary Presented by: Briana Mosley

April 30, 2014 CMGT: 502

Communication Strategy

Successfully merge Comcast and Time Warner Cable to become more than just a cable company, but to create an industry leading technology and media company dedicated to delivering outstanding customer experiences

Communication Objectives

Comcast and Time Warner will integrate cutting-edge strategies to become a tech-media giant in the industry by providing faster innovation and production of better products and features

Communicate the value and benefit of the merger to all stakeholders

Communicate the commitment both companies have to provide the best services to customers

Produce an exciting buzz around the merger of Comcast and TWC while presenting the news as a groundbreaking industry-wide move

Stakeholders ! Comcast Owners ! Time Warner Cable Owners ! Employees

• Comcast • TWC

! Investors ! Shareholders ! Media

•  Industry •  National

!  Subscribers •  Comcast •  TWC

!  Government Regulators !  Competitors !  Content Providers (TV Studios) !  Consumer Advocates

Stakeholder Analysis

Attitude

Impact Advocates Adversaries

Antis Allies

Comcast Employees

Comcast Owners TWC Owners

Investors

Shareholders TWC Subscribers

Consumer Advocates Industry Media

TWC Employees

National Media

Government Regulators Comcast Subscribers Content Providers

Competitors

Environment: Risks

Competitors may feel motivated to strike up deals of their own to seek higher percentage of the market

share

Competitors such as Charter Communications

are angered by the acquisition and can

influence negative publicity around the merger

Network blackouts can occur if television networks and other content providers do

not support or approve of the new Comcast TWC deal;

selling content for the price demand of Comcast and TWC

Gaining too much control over the market will lead to

tighter government regulations

A condition proposed prior to closing the transaction may not be satisfying and disrupt the completion of

the deal

Environment: S.W.O.T Analysis

• The deal will reach 1 in 3 U.S. households (money.com)

• More subscribers will give Comcast more power over cable channel negotiations (money.com)

• Improve TWC performance by utilizing Comcast’s own software

• Improve customer service as a combined company

• Merger will not affect horizontal competition since they operate in different markets (gigaom.com)

Comcast does not offer limitless broadband width (gigaom.com)

Too much power over the internet and cable market may lead to future complications

Comcast and TWC consistently rank low on company reputation among consumers (IBTimes source).

Strengths

Weaknesses


• Will help Comcast compete against satellite providers, phone companies, and streaming services such as Netflix

• Sell a bundle of cable channels via the internet

• Maximize value for shareholders (Financial Times)

• Negotiate with TV studios lower prices of content to reach subscribers (gigaom.com)

O P P O R T U N I T I E S


• DISH & DIRECTV potential merger between two biggest satellite TV companies could present huge competition

• In the past, government forced a single cable company from not controlling more than 30% of the market (money.cnn.com)

• Anti-trust laws could affect the progression of the acquisition

• Disapproval from competitors such as Charter Communications and Netflix may affect the potential success of the acquisition

• Lawsuit from the Justice Department to stop acquisition (gigaom.com)

T H R E A T S

Situational Analysis Anti-Trust Laws:

The first out of the only three anti-trust laws, the Sherman Act was passed in 1890 to serve as a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.” (ftc.gov) The anti-trust laws prohibit illegal mergers and business practices, which allow the courts to decide which ones are legal based on the facts. The Federal Trade Commission Act bans “unfair methods of competition” and “unfair or deceptive acts or practices”. The Clayton Act specifically addresses mergers. Section 7 of the Clayton Act proscribes mergers and acquisitions where the effect “may be substantially to lessen competition, or tend to create a monopoly.” Clayton Act also required companies planning larger mergers to notify the government in advance of their plan. (ftc.gov)

*Note Sherman Act is also a criminal law, and if violated individuals may be prosecuted.

Situational Analysis FCC is attempting to re-instate net neutrality rules which “propose that broadband providers – phone and cable companies – be allowed to charge fees for faster delivery of video and other data to consumers” (pcworld.com) Net neutrality is the idea that “all internet traffic should be treated equally”. The rules will prevent broadband internet providers from blocking individual websites served up to the consumer; content will not just be chosen by the provider. However, internet service providers will be allowed to give preferential treatment to traffic from some content providers under a “commercially reasonable” arrangement (wsj.com). The rules may not affect users’ Internet experience right away, but over time it will lead to the launch of new products that use broadband connections in several ways for both home and business for an extra fee. The proposal will give companies like Apple the opportunity to launch new products like offering a video service, which will need a large portion of the broadband pipe. (Wsj.com) For smaller companies this is not good as they will bear the toll of an extra price, while larger companies see this as an opportunity to create new products to take advantage of the open landscape of broadband and charge content websites to deliver to consumers

Federal Communications Commission New Rules

Situational Analysis

The deal will lead to an increase in the number of broadband subscribers, which in turn will lead to subscribers receiving a data cap; a limit on downloads. While Comcast has said it will divest itself of three million pay TV subscribers to meet regulatory standards in order for the deal to go through, the data cap still may reach 78% of the population. Even with those 3 million subscribers gone, 74% of US broadband subscribers will hit a cap. TWC customers currently do not have a bandwidth cap, and the deal may not be satisfactory to them if there becomes a limit on how fast and how much data they can download, for example file sharing, video streaming, etc. TWC and Cablevision are the major cable providers that do not have caps.

Due to the broadband cap, Comcast has volunteered to give up 3-4 million subscribers to have less than 30 percent of the pay TV market after combining with TWC to alleviate concerns about eliminating competitors; As of Monday, April 28th they sold subscribers to Charter Communications (USA Today article)

Comcast’s Limited Broadband Offering


In 2013, the American Customer Satisfaction Index (ACSI), which surveys about 70,000 customers annually, ranked Comcast last and TWC second to last among Internet Service Providers already a low-ranked industry in terms of customer service. (source IBTimes). There are several anti-Comcast social media pages such as “Comcast Sucks” and “I Hate Comcast” where there are over 30,000 likes among them. TWC has received dissatisfied Yelp reviews that portray negative views toward expensive bills and long wait times. A merger such as this one, and cable companies in general, will be forced to raise their customer service standards or be trampled by the competition of Internet, satellite and phone services providers.

American Customer Satisfaction Index


Comcast’s bid for NBC Universal was approved by government agencies in 2011; good standing with government over past deals (money.cnn.com) After 13 months, Comcast executives and the FCC and Justice Department made a deal after an arduous U.S. regulatory review process (reuters.com). One of the conditions of this deal was Comcast relinquishing its management rights of its minority stake in Hulu.

A Successful Merger; Comcast & NBC Universal

Collaborators

FCC

TWC management

Comcast Management

HR

Attorneys

Implementation: Themes & Messages

Innovative

Reliable

Leader

Comcast is and will remain a media conglomerate with the most cutting edge

technology while continuing to provide the best entertainment and services to its

customers

Comcast has proven to be a responsible company with past success acquiring NBC

and establishing key relationships in Congress.

Comcast values its employees and the loyalty of its customers

Comcast and Time Warner Cable will form a phenomenal, results-driven team that will take the cable industry to the next level

Stakeholder Objective Tactics

Subscribers

1, 2 & 3 Consumers Know (e-mail, commercials, etc.); Sales Rep Informs

Media

1, 2, 3 & 4 Press Release; Press Conference; Social Media

Investors/Shareholders 1, 2, & 3 Investor/Shareholder Call; Annual/

Quarterly Report Update

Consumer Advocates 1, 2, & 3 Press Release; Press Conference;

Social Media

Employees 1, 2, 3, & 4 Employee Ambassador Program,

Comcast & TWC Cares

Comcast is and will remain a media conglomerate with the most cutting edge technology while continuing to provide the best entertainment and services to its customers

Key Messages


Investors/Shareholders

1, 2 & 3 Investor/Shareholder Call; Annual/Quarterly Report Update

Government Regulators

1, 2, 3 & 4 Presentation Meeting With Congress

Content Providers 1, 2, & 3 Press Release, Media Coverage,

Letters To Content Providers

Consumer Advocates 1, 2, & 3 Press Release; Press

Conference; Social Media

Competitors 2 & 3 Media Coverage

Key Messages Comcast has proven to be a responsible company with past success acquiring NBC and establishing key relationships in Congress.


Subscribers

1, 2 & 3 Consumers Know (e-mail, commercials, etc.) Social Media; Sales Rep Inform

Employees

1, 2, & 3 Employee Brand Ambassador Program

Media 1, 2, & 3 & 4 Press Release; Press


Consumer Advocates 1, 2, & 3 Press Release; Press


Content Providers

1, 2, & 3 Press Release, Media Coverage, Letters To Content Providers; Sales Rep Informs

Comcast values its employees and the loyalty of its customers Key Messages


Subscribers 1, 2 & 3 Consumers Know (e-mail,

commercials, etc.) Sales Rep Inform

Media 1, 2, 3 & 4 Press Release; Press Conference;

Social Media

Investors/Shareholders 1, 2, & 3 Investor/Shareholder Call; Annual/

Quarterly Report Update

Government Regulators 1, 2, & 3 Press Release; Press Conference;

Social Media

Content Providers

1, 2, & 3 Press Release, Media Coverage, Letters To Content Providers; Sales Rep Inform

Employees 1, 2, & 3 Employee Brand Ambassador

Program; Comcast Cares

Key Messages Comcast and Time Warner Cable will form a phenomenal, results-driven team that will take the cable industry to the next level

Implementation: Tactics

Customers Know

Employees Know

Sales Reps Inform

Social Media Management

Employee Ambassador Program


The Comcast & TWC Effect

Legal Briefings

Customer Appreciation

Presentation Meeting w. Congress

Press Release/Press Conference


Investor/Shareholder Call

Update Annual/Quarterly Reports

FCC Filing

Comcast Cares

Metrics

Social Media Analytics

• Measure the attitudes towards the merger; monitor feedback on social media comment pages and websites created due to the merger

Monitor Media

• Quantity of articles written about the merger

• Tone of articles written

• Monitor industry trades

• Comments left on articles by the public

Sales Reports

• Measure whether quarterly sales have changed year to date

• See if customers have continued or cancelled subscriptions

Website Analytics

• Measure the traffic on our annual reports tab and intranet to see if employees are participating in the employee ambassador program and fseeking information regarding merger

Metrics

Legal Assessment

• Assess executive understanding and knowledge of the legal terms and laws regarding merger

Monitor Customers Satisfaction

•  Investigate if customers are taking advantage of discounts and special offers during merger; make follow up calls and send e-mail surveys

Industry Tracking

• Read industry trades to investigate new trends

• Understand what content providers attitude is toward new merger

Timeline 1st Quarter •  File FCC Plan •  Press Conference/Press Release •  Meeting Presentation with Congress •  Inform Employees & Customers •  Call with Investors

2nd Quarter Legal Briefings with Executives Presentation Meeting With Congress Update and Manage Social Media Update Annual Report/Quarterly Earnings Updated Press Release/Conference

3rd Quarter Updated Press Release/Conference Customer Appreciation Launch

4th Quarter • Settle merger and launch Comcast & Time Warner Cable • Comcast and Time Warner Effect • Continue Comcast Cares

References Higginbotham, S. 2014, April 11. If Comcast gets TWC, three out of four Americans could get a broadband cap. http://gigaom.com/2014/04/11/if-comcast-gets-twc-three-out-of-four-americans-could-get-a-broadband-cap/ Stelter, B. 2014, February 13. Comcast Buys Time Warner Cable for $45 billion http://money.cnn.com/2014/02/13/technology/comcast-time-warner-cable-deal/ Steel, E. 2014, April 24. Time Warner Cable chief defends merger plan with Comcast. Financial Times. http://www.ft.com/intl/cms/s/0/d7985b3a-cbb7-11e3-8ccf-00144feabdc0.html#axzz2zx4hfGNb Garrahan, M. 2014, April 24. Netflix attacks Comcast’s TWC deal. Financial Times. http://www.cnbc.com/id/101613058 Roberts, J. 2014, April 9. Antitrust issues abound as Comcast explains Time Warner Cable deal in the Senate. Gigaom.com. http://gigaom.com/2014/04/09/antitrust-issues-abound-as-comcast-explains-time-warner-cable-deal-in-the-senate/ Zara, C. 2014, February 17. Comcast-Time Warner Cable Merger Promises Worst Customer Service Disaster In History. International Business Times. http://www.ibtimes.com/comcast-time-warner-cable-merger-promises-worst-customer-service-disaster-history-1556129 http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws Gross, G. 2014, April 28. FCC’s new net neutrality proposal: What do we really know? PCworld.com. http://www.pcworld.com/article/2148900/fccs-new-net-neutrality-proposal-what-do-we-really-know.html Nagesh, G. 2014, April 23. FCC to Propose New ‘Net Neutrality’ Rules. The Wall Street Journal. http://online.wsj.com/news/articles/SB10001424052702304518704579519963416350296 Adegoke, Y. Levine, D. 2011, January 29. Comcast Completes NBC Universal Merger. Reuters. http://www.reuters.com/article/2011/01/29/us-comcast-nbc-idUSTRE70S2WZ20110129 James, M. 2014, April 27. NBCUniversal participates in Comcast Cares service day. LA Times.http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-comcast-cares-nbcuniversal-la-community-service-20140426,0,2691096.story#axzz30LTLdjJY

Snider, M. 2014, April 28. Comcast Sheds Customers in Charter Deal. USA Today. http://www.usatoday.com/story/tech/2014/04/28/comcast-charter-reach-deal/8381783/

Mosley Executive Summary Comcast Aquistion

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