Report: Deal to benefit Time Warner Cable
Purchase of Adelphia will help get better rates from programmers.
NEW YORK (CNNMoney.com) -- Time Warner Cable's deal to buy Adelphia Communications will help the cable company bargain for better rates from programmers, although the costs savings won't likely be passed on to consumers, according to a report in The New York Times on Monday.
The company will gain 14.5 million more cable customers, a 29 percent increase in a deal that could be closed Tuesday. Time Warner Cable will also become the primary cable provider in Los Angeles, which will attract more attention from programmers, the newspaper reported.
Although the company stands to benefit from the advantage the acquisition will give it, analysts don't expect it to be as great an advantage as was Comcast's acquisition of AT&T in 2002. That acquisition doubled the subscriber base of the cable company and allowed it much more influence with programmers, the Times reported.
Time Warner Cable's savings on programming will likely not be passed onto consumers, as the company will probably offer more revenue-producing services like digital phones and video-on-demand, according to the newspaper report.