Georg Szalai

Cable TV giant Charter Communications and Liberty Broadband Corp. have entered into a definitive agreement under which Charter has agreed to acquire Liberty Broadband, part of the empire of John Malone, in an all-stock transaction.

The US pay TV industry in 2013 recorded its first-ever full-year subscriber decline, SNL Kagan said in confirming what industry watchers had previously predicted.

Cable TV, satellite TV and telecom firms offering video services collectively shed 251,000 subscribers in 2013, led by continued cable losses, the research firm estimated. The industry added 40,000 video subscriptions in the fourth quarter, helped by a return to video sub growth at cable giant Comcast, but it wasn't enough to make up for losses earlier in the year.

As of the end of the year, the number of pay TV subscribers dipped to approximately 100 million, according to SNL Kagan. Losses from cable operators again fueled the overall drop. SNL Kagan estimates cable operators lost nearly 2 million video subscribers in 2013 and 388,000 in the fourth quarter to end the year with fewer than 54.4 million basic video subscribers.

Time Warner Cable CEO Rob Marcus told an investor conference in more detail why his company's board agreed to sell to Comcast, calling the proposed combination a dream deal with big upside potential. He said his management team was focused on maximizing shareholder value and enhancing consumers' user experience in evaluating possible deals.

"The combination truly is a dream combination," he concluded. "The value creation opportunity is huge." Marcus added that while the TWC board saw value upside if the company remained independent, it felt there was more upside with Comcast as the new owner.

Charter Communications, in which John Malone's Liberty Media owns a 27 percent stake, had also bid for TWC. Discussing his future after the close of the proposed deal, Marcus said: "Whether or not I'll be here [at the conference] next year...is a question that remains to be answered." The two companies have said they expect to close the deal by the end of 2014. With Comcast Cable boss Neil Smit set to run the combined company, industry observers have been wondering where Marcus may land next.

With satellite TV operators DirecTV and Dish Network set to report fourth-quarter financials, respectively, Wall Street is looking for the latest management commentary on consolidation in the pay TV industry, a hot topic since Comcast unveiled its deal to acquire Time Warner Cable.

A merger deal between DirecTV and Dish Network failed more than a decade ago, but the idea still comes up regularly, and Wall Street observers expect the top executives to be asked about the possibility. Wells Fargo analyst Marci Ryvicker predicted that the Comcast-TWC transaction would spur other deals.

"We view an approved Comcast-TWC transaction as an incremental positive for Dish-DirecTV," she wrote. She noted, though, that a key variable would be Dish chairman Charlie Ergen's "time frame and focus, i.e., we still think priority number one is wireless" for him. Macquarie Securities analyst Amy Yong said that the Comcast-TWC deal would allow the satellite TV giants to argue that they should be allowed to merge if they want because they are facing a stronger competitor.