Bright House Emerges as a Player in the New Cable Drama

The collapse of Comcast’s bid to acquire Time Warner Cable has led to a flurry of talks in the cable industry over other possible deals. And there is an unlikely player at the center of the unfolding drama: the Newhouse family’s Bright House Networks.

Apparently, Time Warner Cable and Charter Communications have separately been in touch with Bright House at the highest levels to discuss an acquisition of the company. For Charter, the fourth-largest US cable operator, acquiring Bright House, an operator with two million customers and steady cash flow, could be a steppingstone to go after the much larger Time Warner Cable. Such a deal would strengthen Charter’s balance sheet and increase its borrowing capacity. One reason Time Warner Cable rejected Charter’s bids last time around was its concern about the resulting debt load on the combined company. For Time Warner Cable, an acquisition of Bright House would accomplish two things: it would take away an asset that could help Charter’s deal ambitions, while making Time Warner Cable more expensive and complex to acquire.