Stewart Fish, Menting Xu, David Dowdy Executive Summary Over the past decade, significant changes in regulations, advances in technology, and shifts in competitive dynamics began transforming the cable industry. Companies within the industry were forced to adapt by acquiring economies of scale and scope. American Cable Communication was seeking to acquire AirThread Connections for three reasons. The two companies could help each other become more competitive in an industry that is moving toward bundled package service offerings. The acquisition would help both companies expand into the business market, and lastly American Cable was in a unique position to add value to AirThread’s operations. They could obtain a significant amount of …show more content…
According to Stafford and Heilprin, “American Cable Communications (ACC) was one of the largest cable operators in the United States (AirThread Case).” ACC serviced roughly 24.1 million video subscribers, 13.2 million high-speed internet subscribers, and 4.6 million landline telephony subscribers. In 2007, ACC saw revenues of $30.9 billion and had net income equaling $2.6 billion. In order to adapt to the changes in the industry, ACC started aggressively acquiring smaller companies, which resulted in huge customer growth and the development of, “a strong corporate finance team with significant acumen in identifying, valuing, structuring, and executing corporate control transaction (AirThread Case).” That being said, ACC has set its sights on yet another company--AirThread Connections--with the expectation of further revenue growth and customer acquisition and retention. AirThread Connections is a wireless network provider that distributes to more than 80 million people across the United States. According to Stafford and Heilprin, “AirThread Connections (ATC) was one of the largest regional wireless companies in the United States, providing service in more than 200 markets in five geographic regions (AirThread Case).” In 2007, ATC had $3.9 billion in revenue and approximately $400 million in operating incomes. On top of that, ATC had, “an extensive set of roaming agreements with other carriers to provide its
* From the statement of AirThread case, we know that American Cable Communication want to raise capital by Leveraged Buyout (LBO) approach. This means ACC will finance money though equity and debt to buy AirThread and pay the debt by the cash flows or assets of AirThread.
One month has to look at competition since the early 1990’s, especially since the act 1996 act. The most effective competition has come from technology evolution that enabled multiple platforms with different product-characteristics and economics to compete. They, in turn, then forced each other into cycles of further innovation. When the telecommunications act of 1996 has passed, there were hints of incipient competition in both the long-distance and video-distribution markets as a result of new technology. Local telephony was still essentially a monopoly. Although wireless was thriving, it was seen primarily as a purely mobile service.”
At the time of this launch, expectations for the cable industry itself were high: with many rural
As previously mentioned, the acquisition of AT&T and DirecTV was recently approved by the boards of both companies. The deal implied that the AT&T would have to pay the shareholders of DirecTV $95 per share as well as the company’s debt that would make the total transaction value to amount to $67.1 billion. The acquisition or merger between these two companies was fueled by various factors that were geared towards creating one company that will be strategically positioned to accomplish significant incremental growth. The growth would be achieved through providing customers competitive and innovative services
This article written by Leslie Picker and Cecilia Kang primarily focuses on the issue regarding the merger of cellular phone giant AT&T with the entertainment conglomerate Time Warner. In late October the New York Times broke the news of these two joining and many industry annalists viewed the merger with skepticism as well as, outraged consumer groups. Individuals believed that AT&T and Time Warner would terminate any competition and create unfair pricing in order to encourage more mass media consolidation resulting in a market that would be strikingly similar to a pure monopoly.
Is it not slightly alarming that Comcast has managed to grow at such an alarming pace? Although it is at the same time truly amazing how well they are able to gain ownership of successful business ventures and re distribute
According to my analysis of the Accessline’s proposed term sheet, I do not believe that Apex would serve its own interests, or those of its investing partners, by investing in Accessline according to the terms proposed. By investing at the proposed valuation, according to the proposed control and incentive structure, Apex would be shouldering a disproportionate share of the risk should Accessline fail to meet its performance targets, or require fresh inflows of capital from future investment rounds. Nor can Accessline take the sort of steps necessary to protect its investment in the case of management failure.
Comcast Corporation is a company in the services sector in the cable and broadcasting industry located in the United States that offers media, entertainment, and communications. The Corporation is headquartered in Philadelphia, Pennsylvania (Comcast, 2016). This paper will be an extrapolation of Comcast’s history from the day it was founded to its current stature.
For the past ten years, Hulu has been among the most competitive online streaming services. Beginning as a joint venture created by 21st Century Fox and NBCUniversal to “distribute their television programming over the Internet,” (Harvard 2017) Hulu has expanded generously, offering the four largest broadcasting networks. In the wake of a new television era, Hulu has the potential to serve as a Multichannel Video Programming Distributor (MVPD). The following write-up includes an analysis of Hulu’s current market standings, including an investigation of growth statistics as well as the company’s overall marketing situation.
Many entertainment players like the FOX, ABC,CBS and NBC especially in the United States of America are bundling their programs to create a large fan base who are majorly active users and subscribers united by common shared interest, ideas and experiences and who regularly return on every day basis to the company’s properties and brands. Bundled products offer these entertainment companies with high revenue as compared to when they could have been sold in individual package. However, customers in the market feel that a one packaged product suits their tastes than the bundled products and they often wait for the best time to buy the one packaged product as opposed to the bungled package. A la carte approach is where consumers select one program
Moreover, AT&T was rated high of social media influences by 691 thousand followers on Twitter and 5.7 million likes on Facebook. Also, AT&T is the only telecommunications company honor to be included in Fortune's list of the most admired company in America. According the article “AT&T Ranks #1 in Telecom Globally in FORTUNE’s Most Admired Companies for Third Year in a Row”, the author reported “Our industry has never been more dynamic than it is right now. And that makes this recognition particularly meaningful,” said AT&T Chairman and CEO Randall Stephenson, and “the publication also placed AT&T at #37 among the Top 50 Most Admired companies in the world. This is our fourth year on the Global Top 50 list. AT&T is also the only communications company on the list”. Clearly, the AT&T company’s achievements are a measure of consumer confidence, and this is also attracted people believe on the company strategy. Furthermore, AT&T Company confirmed their power when they are combined with Time Warner in future. According the article “AT&T To Buy Time Warner For $85 Billion”, Zarroli said “Now, Time Warner - Time Warner is really a content company today. It does movies and TV programs. It owns HBO and CNN and Warner Bros. studios. It used to be in the cable business, but it got out of that.” Admittedly, AT&T Company is finding many ways to convince the
Using this growth rate we calculated a terminal value of $6782.88 and a PV(terminal value) of $4698.39:
1. Changes in the US regulatory environment created additional challenges for Continental’s core business: 1992 Cable Act limited the cable TV companies’ ability to raise cable rates whereas costs at market prices reached up to $2000/subscriber. This inevitably led to constrained profit margins
Netlix strategy by virtue of product design addresses the bargaining powers of both buyers and suppliers. It’s highly price efficient for both. The threat of new entrants is addressed by Netflix’s technologically savvoy “linear linking” of newer apps over broad band width. The company strategically designed the mapping and application of video streaming packages to where it has became highly speacilized. New entrants to the video streaming market would need equal broad band capability. Strategically, Netflix also didn’t compete against the cable service giants, rather relied exclusively on internet carrying cable outlets.
The American Connector Company (ACC) should be extremely concerned with the im-pending entrance of DJC to the US landscape. Any new entrant will most likely be of the mentality to try and take as much market share as quickly as possible. This course of action usually involves a period of time when the new company will plan on operating at a loss, and will thereby be will-ing to price below market average with small margins. Realization of this threat would immedi-ately disrupt ACC’s pricing strategy and could affect long term profitability.