US cable firm Charter Communications Inc, which is controlled by Microsoft co-founder Paul Allen, filed for bankruptcy protection on Friday. The firm confirmed last month it would make the move by 1 April following a deal it had agreed with senior debt holders. Charter said it had previously been able to pay for or renew its …
do the math?
I don't know how the CTV industry refers to the mix of products people buy, but ranging I'd guess from the low end of "basic" service at $30/month, to a high end of $100 or more per month? So maybe the average customer's bill is $75/month?
I reckon that's nearly $5B/year in gross receipts.
Wages? With 16,000 employees my estimate might be on the high side at $1.2B/year, but it's just a guess.
That gives them a cool $3.8B/year to pay capital expenses (but I presume they're fully built out and only upgrading/replacing stuff), pay for the content, and pay down debt. (And I have no idea how much the content costs.)
They have $21B in debt? How much debt did they have last year? Had they been paying any of it down? They're going to reduce their debt by $8B? I only know one way to reduce debt and that's by paying it off with cash? Where was that going to come from?
Some grass mud horse probably ought to be going to jail. WTF?
Re: do the math?
I don't have their service, but the neighboring parishes (counties) here in south Louisiana are covered by Charter. They reportedly had some rather significant infrastructure rebuilding expenses due to hurricane damage in 2005. "Wash, Rinse, Repeat" in 2008.
From what I've been told, their "customer service" (read: complete lack of) during those periods lost them huge chunks of business in the aforementioned region.
If there really WERE competition amongst cable providers this would be a bad thing. But there isn't, so... meh.
Re: do the math?
Re: "I only know one way to reduce debt and that's by paying it off with cash?"
I've no idea what's planned here, or your guesses at the financials, but there are at least to other ways to reduce debt:
1. Sell off assets or part of the business to raise cash.
2. Convince some of the debt holders to accept shares in exchange for their debt. This is especially common during bankruptcy since the debt holders may get told "you can have 25% of your debt paid back now and lose the other 75%, or you can accept shares and hope you get more of the value back long-term".
I think they maybe made some bad investments in satellite and voice communications ventures south of the border. Not certain though.
Charter and Bankruptcy
Complete idiocy (when they rise that high) in customer service: over-priced products: steadily-increasing prices for constantly more irritating drivel masquerading as entertainment: a real tendency to choose monopoly markets so as not to have to bother with competition...I feel true sympathy for them. Or, no...I know what it is: hatred. Not that I get Charter or anything.