MW Will a Charter-Cox merger prove that bigger is better in a fast-declining cable marketplace?

By Lukas I. Alpert and Steve Gelsi

The companies are betting consolidation will be the key to survival, but the question of Trump administration regulatory clearance could weigh on the deal

In a sign of the pressures being brought by a cable-television market in fast decline, two of America's biggest providers, Charter Communications Inc. $(CHTR)$ and Cox Communications, have announced plans to merge, hoping that greater size will prove to be the key to survival.

The combined companies would serve more than 37 million customers across 48 states, which would make it the largest single cable and internet provider in the country. The deal is valued at $34.5 billion, making it one of the largest mergers announced in 2025.

"Together, we will be better positioned to aggressively compete in an expanding and dynamic marketplace against national and increasingly global competitors," said Charter Chief Executive Christopher Winfrey in a call with analysts.

"Our larger footprint will give us better marketing and branding capabilities but will also allow us to expand investment in product development, AI tools and innovation, accelerating product development and driving greater efficiencies, which will help us to continue to save customers real money," he added.

The deal comes at a time of deep unsteadiness for the cable industry as customers have increasingly cut the cord and moved to streaming video services. There remain about 60 million cable subscribers in the U.S., but that is down from around 100 million a decade ago.

Charter shares rose over 2% in early trading Friday on news of the deal.

Many major cable providers, like Charter, which operates under the brand Spectrum, Comcast Corp.'s $(CMCSA)$ Xfinity and Altice USA Inc.'s (ATUS) Optimum, have managed to slow the hits to their finances through the sale of internet services, but their overall customer bases have been declining.

Analysts viewed the Friday deal as a "no brainer," as Jeffrey Wlodarczak of Pivotal Research Group put it. He noted that Charter's Spectrum had been outperforming its peers due to stronger operating strategies and better pricing, which had lessened the overall exodus of customers.

"We believe these operating strategies are absolutely transferable to the Cox footprint, and again Charter shareholders will also get a boost from the inexpensive price paid and significant synergies and the ability to accelerate core Cox results using Charter operating strategies," he wrote in a note to clients.

Craig Moffett, from the research firm MoffettNathanson, said the deal makes great sense and there are many areas, particularly in mobile service, where the companies will complement each other, but the deal, he said, isn't transformative.

"The synergies are certainly attractive - the companies have cited $500 million of annual cost synergies within three years of the transaction close, and there are are surely additional revenue and capex synergies to be had here as well - but they aren't game-changing. Cox is already a well-run operator," he said.

The proposed deal is largely a stock transaction, with the Cox family ending up with a 23% stake in Charter if the merger goes through. The combined companies would go by the name Cox Communications, but the main consumer product would retain Spectrum branding.

The Charter-Cox deal requires regulatory approval, which Wlodarczak said shouldn't be difficult to secure given the lack of significant geographic and customer overlap between the two existing companies.

But the Trump administration has so far been slow to approve other media transactions, most notably the acquisition of Paramount Global Inc. (PARA) by production company Skydance Media, which is owned by David Ellison, son of Oracle Corp.'s $(ORCL)$ multibillionaire co-founder Larry Ellison.

In its announcement, Charter appeared to pay lip service to the political worldview of the Trump administration, saying the "proposed transaction puts America first," and playing up the number of customer-service jobs the deal intends to bring back to the U.S. from overseas. It also highlighted the political neutrality of the news outlets owned by both companies, in language that appeared aimed at countering criticism of many mainstream news outlets that the administration accuses of anti-Trump bias.

The politics site Axios and the Atlanta Journal Constitution, which are owned by the Cox Enterprises, are not part of the proposed sale to Charter and would remain in the hands of the Cox family, a spokesman said.

Also read: Will ESPN's new streaming service spell the end for cable television?

-Lukas I. Alpert -Steve Gelsi

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May 16, 2025 11:19 ET (15:19 GMT)

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