How far will Time Warner, Cox negotiations go?
Unlike baseball, there is no trade deadline in cable so there's nothing to stop Cox Communications and Time Warner Cable (NYSE: TWC-WI) from swapping any systems anytime they want. Trade rumors suggest that the two could be in the process of doing just that with about $2 billion worth of properties in California.
Cable swaps happen all the time. What makes these reports more interesting is that these talks could have fomented something much bigger-either a cooperative agreement between second and third largest MSOs or, more excitingly, an actual takeover by TWC of the Cox cable business. Both players are reportedly nervous--as well they should be--at how much power Comcast (Nasdaq: CMCSA) will wield when it becomes a broadcaster with NBC Universal. TWC, which recently found out how tough it is to deal with a newly aggressive broadcaster, has never denied it would pursue acquisitions if they were attractive. Privately held Cox could be attractive.
Of course, like baseball trade rumors, this could be all smoke, mirrors, speculation and nothing more. On the other hand, like baseball trade rumors, there's just enough logic behind the reports to make them worthy of some serious attention.
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