Business Breakdowns
Episode 139 Charter Communications: Cable Cash Flows
Business Breakdowns

Episode 139: Charter Communications: Cable Cash Flows

Business Breakdowns

Episode 139

Charter Communications: Cable Cash Flows

Tony Coniaris and John Sitarz are Partners at Oakmark Funds. We cover the history of the cable industry, what the shift from broadband to mobile data usage means for Charter's business model, and how the economics of the bundle model works.

(00:00:22) - (first question) - The role of Charter Communications in daily life

(00:03:43) - Charter Communications as an infrastructure entity

(00:04:30) - Mapping the cable market landscape

(00:09:06) - Evolution of competition within the cable industry

(00:10:16) - Tracing the origins of Charter Communications

(00:15:33) - Initiating business restructuring

(00:16:35) - Exploring the capabilities of cable assets

(00:19:55) - Emerging challengers in the cable arena

(00:26:13) - Examining mobile data trends

(00:27:09) - Exploring the potential of fixed wireless access

(00:30:03) - Conducting business analysis

(00:32:25) - Assessing the impact of consumers 'cutting the cord'

(00:38:31) - Comparing internet-only customers to full cable bundle subscribers

(00:44:08) - The value of comprehensive service packages

(00:45:23) - Identifying major cost factors in the industry

(00:48:50) - Outlining the market structure for cable businesses

(00:53:31) - Anticipating potential industry risks

(00:56:18) - Understanding compute capacity and its implications

(00:57:36) - Reflecting on insights gained from Charter Communications

 

Charter Communications: Cable Cash Flows

Introduction

Matt
This is Matt Reustle and today, we are breaking down the cable giant, Charter Communications. Now if you've enjoyed our Business Breakdown on First Citizens Bank, we were lucky to have some of the Harris-Oakmark teammates, portfolio managers, Tony Coniaris and John Sitarz. Come join us for this deep dive on the cable market and Charter.

Now on Business Breakdowns, we do approach each episode a bit differently. And for Charter, we thought it was really, really important to understand the physical asset of cable. It is a piece of infrastructure that I think we can take for granted in our day-to-day lives. And Tony and John actually give some great food for thought in terms of how the cable market operates and how it acts as somewhat of a utility in our day-to-day lives.

So we spent a big portion of the first half of the conversation, actually outlining the history of cable, the asset itself, what it does differently versus some of the alternatives, both historically and the alternatives today. And then we flash-forward in terms of how the industry is actually operating today. The idea of cord-cutting has become very consensus, but it's not very obvious in terms of how that actually impacts a business like Charter and its flagship product, Spectrum. So we go into some of the case studies that have recently occurred, such as the ESPN negotiations, and then tie it all back in terms of the business model.

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