Talk of Mergers Stirs Cable TV’s Big Players

John Malone, the chairman of Liberty Media, is weighing a deal for Time Warner Cable, according to people briefed on the matter who were not authorized to speak publicly. In this deal, Charter Communications, a cable operator in which Liberty owns a 27 percent stake, would buy Time Warner Cable. Should he reach a deal, he will most likely use the combined company to roll up other cable operators, upending a status quo dominated by giants like Comcast.

Those possibilities are helping to build expectations for deals in an industry that investors and some analysts think is ready for more. Malone has recently become among the most vocal proponents, declaring in April that “there is more consolidation yet to be done.” Uniting cable or satellite television companies would give them more power in negotiating with programming providers like the Walt Disney Company and Viacom, which are demanding ever-higher rates for their channels. Mergers could also help blunt new challenges from companies like Intel, which is working on a subscriber TV service that would be delivered via the Internet. But just as big a target is the broadband Internet service that cable companies also provide. While cable television is mature and will most likely decline in the future, Malone believes broadband has only one direction to go: up. The emerging online rivals to cable TV, like Netflix and Hulu, require the kind of fast data connections that companies like Charter supply.