Altice USA CEO Talks Disney-Charter Carriage Deal: “The Model Is Broken”

Etan Vlessing
·3 min read
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Altice USA CEO Dennis Mathew has weighed in on the recently-struck new carriage deal between Walt Disney Co. and Charter Communications.

“The model is broken. I just have to say, for the last ten years, the consumers have made it clear that there is a significant shift from linear to streaming, and yet the costs for linear have continued to rise. And we as distributors need to find a way to work with our programming partners to put the customer at the center. We need to give them great value,” Mathew told analysts during a conference call on Wednesday after the release of his third quarter results.

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He spoke in the wake of a new-look carriage deal being unveiled by Disney and Charter that is expected to affect future carriage deals for Disney and other entertainment giants. “We need to give them (subscribers) the right content. As we look at these programming deals, we’re bundling in content that basically nobody wants to watch, along with the content that consumers actually want to watch,” Mathew added.

He argued TV viewers want more access to streaming platforms and a more user-friendly experience watching their favorite content. “We’re hearing from our customers it’s challenging to have so many different apps and logins and billing relationships. Those will be part of our conversations as we go forward,” Mathew warned.

During the third quarter, Altice USA continued to lose video subscribers, though at a slightly slower pace, as its latest financial earnings fell on lower overall revenues.

The company said it lost 77,600 video subscribers during the three months to Sept. 30, 2023, against a loss of 84,500 video customers in the year-ago period. Altice USA reported it lost 31,000 broadband subscribers during the third quarter, against a loss of 43,000 customers in the same period last year.

For the latest quarter to Sept. 30, 2023, Altice USA posted net income attributable to shareholders at $66.8 million, against $85 million earned in the third quarter of 2022. That was on overall revenues falling 3 percent to $2.32 billion.

Residential revenue declined 3.4 percent year-on-year to $1.83 billion during the third quarter due to the loss of higher revenue-generating video subscribers. Altice USA serves around 5 million residential and business cable customers across 21 U.S. states and through its Optimum brand.

The cable company during the after-market analyst call also gave a short update on a corruption investigation at Altice’s operations in Europe, especially in Portugal where a fraud probe was launched. An accompanying probe into the Altice USA to asses any cross-Atlantic impact was also launched.

“At this point, our internal investigation is substantially complete. The investigation and its results are not expected to have a material impact on our business. We will, of course, evaluate any additional information that becomes available to us and we will assess whether and what remedies we may pursue,” Altice USA CFO Marc Sirota told analysts as part of a prepared presentation to analysts.

The European probe led to the departure of the chief procurement officer of Altice USA, Yossi Benchetrit, after he was placed on leave, and former Comcast exec Jennifer Yohe stepped in as the new chief procurement officer.

Altice USA looked at the company’s supplier and vendor relationships amid a pause on some fiber capital upgrade expenditures until the internal investigation into possibly unlawful business practices was completed.

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