Comcast Close to Subscriber Deal With Charter Communications

Charter Communications could acquire nearly four million extra subscribers in a two-stage deal under discussion with Comcast, in what would represent a consolation prize for Charter's nearly yearlong pursuit of Time Warner Cable.

In the first part of the deal now being discussed, Charter would likely acquire between 1 million and 1.5 million subscribers through a straight out sale, said people familiar with the situation. Separately, Comcast plans to spin off a company holding a few million more subscribers. Under the plan, Charter would take an equity stake in that company and could buy the entity over time. If that happened, Charter would end up with nearly four million in additional subscribers, nearly doubling its size to around eight million video customers. That would make it the second-largest cable operator, helping advance the growth strategy set out by Charter and its biggest shareholder, Liberty Media, to consolidate the fragmented cable industry. For Charter, the total cost is likely to be more than the $18 billion Comcast had said it hoped to receive for the sale of three million subscribers. The deal under discussion would also involve system swaps affecting nearly one million other subscribers. Such swaps could help both Comcast and Charter boost their presence in key markets.