After a decade of global expansion that has seen his Altice telecom empire proliferate across Europe and the U.S., Patrick Drahi is facing the hard times. 

According to Bloomberg, the Moroccan-born Israeli billionaire is dealing with the rapidly increasing cost on a debt load that now exceeds $50 billion. 

In late January, the news service noted, Drahi was able extend maturity on nearly $5.8 billion of debut held through his Altice France S.A. operation. But that resulted in additional annual interest costs of more than $100 million before tax credits. 

Meanwhile, a significant portion of Altice’s bonds and loans are trading at or near distressed levels, Bloomberg said.

Drahi took advantage of historically low borrowing costs as he engaged in a series of aggressive telecom acquisitions, including his $17.7 billion purchase of Cablevision in 2015, as well as his simultaneous $9.1 acquisition of another U.S. cable company, Suddenlink. 

More recently, the 59-year-old Drahi spent approximately $4.2 billion to purchase an 18% stake in British telecom giant BT Group.

But borrowing costs have risen as the value of these assets have declined. 

Share prices for Altice USA (aka the former Cablevision Systems) have decreased nearly 67% over the last year, with the New York-focused operator facing heaving competition from myriad sources for its core business of ISP provision.

Notably, Drahi recently rejected lower-than-expected bids for Suddenlink that could have generated around $20 billion to help pay off debt, sources told Bloomberg. 

But there is a growing consensus among telecom industry watchers that Drahi soon won't be in a position to be as selective, and that asset divestments will come soon.

Francois Godard, an analyst at Enders Analysis Ltd., described Drahi's situation as “complex,” adding, “We’ll see if he was swimming naked.” ■

After four straight quarters of broadband subscriber losses, a 38% decline in its stock price and the possible sale of its former Suddenlink Communications systems, Altice USA said it has named a new CEO -- Comcast executive Dennis Mathew -- while its longtime chief executive Dexter Goei becomes executive chairman.

The move will become effective as of October 3. Mathew is a 17-year veteran of the telecom industry, and has served in several operational roles at Comcast over the years. According to Altice USA, Mathew was most recently senior VP of its Freedom Region (Southeast Pennsylvania, New Jersey, Northern Delaware) responsible for strategic, financial, and operational performance at those systems. He earlier served as SVP for its Western New England Region (Connecticut, Vermont, Western Massachusetts, and areas of New York and New Hampshire) and has extensive experience in running and transforming cable businesses.

“I am honored to accept the role of CEO at this important juncture for Altice USA,” Mathew said in a press release.  “As Altice USA advances its position as a converged fixed and wireless player, I see immense potential to further connect with and serve customers in new ways while elevating the company as the connectivity provider of choice.  I look forward to leading such an innovative company that has the right vision and long-term strategy centered on investments in fiber infrastructure and a superior customer experience.”

Mathew will be based in Altice USA’s Long Island City, New York headquarters.

“I am pleased to welcome someone of Dennis’ caliber and mindset to Altice USA,” Altice USA founder and chairman Patrick Drahi said in a press release.  “He has an impressive track record at Comcast, driving transformation and success in highly competitive markets and redefining the role of telecommunications services for customers through a superior service experience, all of which will serve us well.  With our fiber network deployment well underway, I am confident that Dennis is the right leader to build on the momentum we have made as we bring the most advanced fiber broadband services to our customers across the country.  Dennis’ leadership approach, along with his commitment to our people, our customers, and our communities, will have a tremendous impact on Altice USA today and into the future.”

Goei, who intends to return to Europe with his family and helped in the selection of a new CEO, was Altice USA’s first CEO, taking over the company that was formed when European telecom giant Altice N.V., burst on the U.S. cable scene after its purchases of Suddenlink  Communications and Cablevision Systems. Goei, a longtime Altice N.V., executive, was tasked with implementing its parent’s strict cost cutting strategy, steering the operations to an initial public offering in June 2017. 

For a while, the strategy worked -- in 2019 Altice USA was one of the top performers in the cable business. But a footprint that was largely saturated -- its New York systems had some of the highest broadband penetration in the industry -- stiff competition from Verizon Fios (which operated in about two-thirds of its footprint) and the pandemic took its toll on subscriber growth. Altice USA lost 13,000 broadband customers in 2021 -- the only major cable operator to do so -- and has lost more than 50,000 high-speed data customers in the first half of 2022.  

In August, Goei acknowledged that the company was seeking a buyer for its Suddenlink systems, with some reports speculating that it expected $20 billion from a sale.  While no deal appears imminent, most analysts believe that Suddenlink will attract considerably less. .   

Drahi praised Goei for his stewardship of the assets, adding that the executive “has effectuated a business and cultural transformation at Altice USA over the past seven years, building the company into what it is today with passionate employees who are committed to our customers and to each other.  Given his intention to return to Europe with his family, Dexter has been involved in our search for a new CEO and I am grateful for his partnership to ensure Altice USA has the best leader to advance the company into its next phase of growth.  I have the highest respect for Dexter as a business partner and confidant and am pleased that he has agreed to serve as Executive Chairman of the Board of Directors while also supporting Dennis in his transition to CEO and working on key strategic initiatives.”

As executive chairman, Goei will support Mathew in the transition and work on key strategic initiatives. 

“Leading Altice USA has been the most rewarding experience in my career,” Goei said in a press release. “From our fiber network deployment and launch of multi-gig fiber broadband offerings to our diversity and inclusion programs and local community engagement efforts, I could not be prouder of what we have accomplished together thanks to the leadership team and the thousands of dedicated employees across the country who enthusiastically serve our customers and communities every day.  In the months ahead, my focus will be on ensuring a smooth leadership transition and working closely with Dennis on our key strategic initiatives.  I welcome Dennis to the Altice USA family and have the utmost confidence in him as we continue to accelerate and deliver on our fiber strategy and embark on the next chapter of our story.”■

Altice N.V. founder and chairman Patrick Drahi entered the world of big-time art auctions Monday, agreeing to buy Sotheby’s in a deal valued at $3.7 billion that will ultimately take the venerable auction house private.

Drahi is best known in the cable industry as the man who shelled out $9.1 billion for Suddenlink Communications in 2015  and one year later gave the Dolan family $17.7 billion in cash for Cablevision Systems, creating Altice USA. Once a unit of European telecom giant Altice N.V., Altice USA split from the parent last year. Drahi remains chairman and controlling shareholder of Altice USA and president of the board and controlling shareholder of Altice Europe.

In a press release, Drahi said the funds for the Sotheby’s purchase are not linked to Altice USA, or Altice Europe.

Drahi’s BidFair USA agreed to pay Sotheby’s shareholders $57 each for their stock, a 61% premium to its closing price on June 14. According to reports, most of the purchase price ($2.66 billion) is in cash.

Drahi, a long-time collector and philanthropist, is expected to give the currently publicly traded Sotheby’s more flexibility after he takes the company private. In a business that is largely seasonal, that should come as welcome news.

“Patrick Drahi is one of the most well-regarded entrepreneurs in the world, and on behalf of everyone at Sotheby’s, I want to welcome him to the family,” Sotheby’s CEO Tad Smith said in a press release. “Known for his commitment to innovation and ingenuity, Patrick founded and leads some of the most successful telecommunications, media and digital companies in the world. He has a long-term view and shares our brand vision for great client service and employing innovation to enhance the value of the company for clients and employees. This acquisition will provide Sotheby’s with the opportunity to accelerate the successful program of growth initiatives of the past several years in a more flexible private environment. It positions us very well for our future and I strongly believe that the company will be in excellent hands for decades to come with Patrick as our owner.”

[full disclosure: Tad Smith was once CEO of Reed Business Information, a former parent of Multichannel News]

LionTree Advisors is serving as financial advisor to Sotheby’s in connection with the transaction, and Sullivan & Cromwell LLP is serving as the company’s legal counsel. BNP Paribas and Morgan Stanley are acting as financial advisors to BidFair, BNP Paribas acted as sole financing provider, and Hughes Hubbard & Reed LLP and Ropes & Gray International LLP are serving as its legal advisors.

Drahi’s personal collection tends to gravitate more toward Modern and Impressionist works, according to the New York Times, and the pieces he buys usually sell for $5 million or less, a far cry from some of Sotheby’s more famous auctions. Last year Sotheby’s sold a work by Jean-Michel Basquiat for $110.5 million and in May sold a Monet for $110.7 million.

“I am very honored that the Board of Sotheby’s has decided to recommend my offer,” Drahi said in a separate press release. “With my family, we are very enthusiastic to build together with its current management and their teams the future of Sotheby’s, a fascinating and multi-secular company with such a celebrated history of uniting people all over the world through culture and arts.

“For my entire life, I have been passionate about this industry and I believe the opportunities and growth potential are significant for Sotheby’s,” he continued. “I am making this investment for my family, through my personal holding, with a very long-term perspective. There is no capital link with Altice Europe or Altice USA. As the future owner, I have full confidence in Sotheby’s management, and hence do not anticipate any change to the company's strategy. Management and their exceptional teams and talent around the world will continue to operate with my full support. This investment will further demonstrate the anchoring of my family in the United States, a country where we have been very welcomed since the successful acquisitions of Suddenlink in 2015, Cablevision in 2016 and just recently Cheddar.”

Altice USA stock, weighed down by the enormous debt load of its parent, European telecom stalwart Altice N.V., is getting some needed relief in the form of a spinoff that should remove at least some of the shackles that have restrained the shares since the company’s June IPO.

Altice N.V. announced its plan to complete the split from the U.S. division by the second quarter. As part of the deal, Altice USA will issue a $1.5 billion dividend, which will mainly fall to the Altice N.V. shareholders that own about two-thirds of the U.S. unit. After the deal is closed, the European operation will be renamed Altice Europe and be led by current Altice N.V. chief financial officer Dennis Okhuijsen, rising to CEO. Former CEO Michel Combes left the company in November and was named president and CFO of Sprint earlier this month.

Altice USA CEO Dexter Goei and his team will remain in their current roles after the closing. And Altice founder Patrick Drahi will remain in control of both companies, serving as president of Altice Europe and chairman of Altice USA.

The separation should remove one of the biggest overhangs on Altice USA stock — its parent’s heavy debt load and uncertainty surrounding the European telecom market. Altice USA went public in June 2017 at $30 per share and enjoyed a strong run-up in the days after the IPO, rising as high as $34.30 per share by June 23. But concerns over that heavy debt — about $55 billion — and competitive issues over its wireless business in France negatively affected the U.S. stock. Altice USA finished the year down about 35% ($11.48 each) to $21.23 per share.

Investors appeared pleased with the split, driving Altice USA shares up 9.6% Jan. 9 to $23.11 each.

Taking the Long View

While the split was expected to remove much of the onus on the U.S. stock, Goei, in a conference call with reporters after the transaction was announced, said short-term market reaction is not one of the company’s biggest priorities.

“We feel we’ve positioned the U.S. stock and the European stock to perform to the best of its abilities and to reflect appropriately the value that the respective business should be valued at relative to its peers,” Goei said. “Let’s see how the market reacts, but this is obviously not a short-term thing we are doing today.”

In a research note, Jeff Wlodarczak, Pivotal Research Group CEO and senior media & communications analyst, wrote that the spin solves a lot of problems for the U.S. operations. It not only removes concern that the U.S. business may be pressed into shoring up the European operations (particularly in France), but also simplifies the structure and boosts the U.S. stock’s public float from 10% of outstanding shares to 42%, which should attract a wider swath of investors and free the company to return capital to shareholders through more aggressive buybacks.

Altice USA said that as part of the separation, it plans to buy back about $2 billion of its stock over the next three years.

But this plan doesn’t solve everything quite yet. Despite a management pledge to reduce leverage targets from 5.0-to-5.5 times cash flow to 4.5-to-5.0 times, initially the deal will increase debt at the U.S. company to about 5.8 times cash flow.

That added debt and the overall climate around deals means it is unlikely that Altice USA will embark on any buying spree — one of the early reasons to buy the stock — anytime soon.

“I don’t think we are there yet in terms of thinking about where our acquisition strategy could be,” Goei said on the reporters’ call. “I think this is an important moment for the group to focus on our existing operations and deliver on what we’ve promised in our respective geographies in Europe and the U.S. Over time, we suspect that the clarity and simplicity of our structure will help our investor base be supportive in things that we may want to do going forward.”

But he hinted that M&A isn’t totally out of the picture. “The DNA of the group is to try and grow strategically over time, but it is clearly not a focus today,” he said.

New Commitment to U.S. Arm

For now, the deal appears to further solidify Altice’s commitment to the U.S. operation. Problems at its European unit began to surface in November, when a big earnings shortfall at the company’s French wireless operations spooked investors, sending the European stock into a tailspin. For U.S. investors, the French unit’s failures signaled possible flaws with the domestic model, and the possibility that the U.S. business would be pressed to bail out its parent.

And though many analysts were skeptical of Altice’s cost-cutting ambitions — when it bought Cablevision in 2016 it pledged to shave $900 million in expenses, a move many believed would eviscerate the company — it has so far kept its promise. In Q3 Altice USA said its run-rate non-programming efficiency savings were more than $900 million since the Cablevision purchase.

In a research note in November, MoffettNathanson principal and senior analyst Craig Moffett noted that per-subscriber programming costs increased between 6% and 7% at Altice USA, almost half the 12.7% increase at much larger Comcast in the period. While Altice said it expects future programming-cost increases in the high single digits, Moffett added that Altice has captured much of the efficiencies it promised already, and there is no reason to believe more won’t come.

“With margins still rising rapidly, both [year-over-year] and sequentially, it doesn’t appear they are done yet,” Moffett wrote in the report.

European telecom giant Altice N.V., parent of No. 3 U.S. cable operator Altice USA, announced a sweeping management restructuring Friday that will see the CEO of the operation step down, while the chief of its domestic operations will assume a dual role.

Altice N.V. CEO Michel Combes resigned Friday and Altice USA chairman and CEO Dexter Goei will take on the additional role of CEO of the European parent. Altice founder Patrick Drahi will also return as president of the board of directors of the European telecom giant.

The moves come after Altice N.V. has stumbled in its European telecom business. Its stock was down more than 20% Nov. 3 after a disappointing third quarter and the revelation that it would come in at the low end of earnings guidance for the year. So far this year Altice N.V. shares are down about 40% and the bleeding has spread to Altice USA, which has seen its stock fall more than 25% since its June IPO, mainly, according to analysts, because of its ties to the parent company.

According to reports, some investors have worried that Altice N.V.’s poor results could jeopardize its ability to service its heavy debt load – about five times its cash flow and substantially higher than its European telecom counterparts.

In a statement Altice N.V said the new management structure “is designed to better implement Altice's strategy, create clearer accountability amongst management and improve the operational and financial performance of the business. It aligns more fully the interests of founders and group management, both with significant ownership in the group, and the public shareholder base.”

In addition to Drahi’s and Goei’s new roles, Altice N.V. chief financial officer Dennis Okhuijsen will assume the additional role of CEO of Altice Europe; and SFR Media CEO Alain Weill was named chairman and CEO of SFR Group and chief operating officer of Altice Media.

"Michel has been an important part of the Altice story when he first joined the Board of Altice,” Drahi said in a statement. “He provided key support and judgment as we developed our expansion strategy.  As CEO, Michel critically created the group structure to operate a transatlantic communications business while driving key technology, research and innovation initiatives, which will serve Altice for the future.  I would like to personally thank him for his contribution, integrity, loyalty and friendship."

Combes joined Altice N.V. in 2015 as chief operating officer, after leaving equipment maker Alcatel-Lucent which was acquired by Nokia. He became Altice CEO in 2016, when Goei stepped down from that role to take over as head of the U.S. cable operations.

"I would like to thank Patrick and the team for their confidence over the past years,” Combes said in a statement. “It has been a privilege to be part of the Altice story, accompany the expansion of the group and lead the industrialization of the convergence strategy. With Patrick returning as President of the group, Altice will be well positioned to execute its strategy across all operations."

So much for taking a breather.

European telecom giant Altice N.V., just two months after spinning off its U.S. cable operations into a separate publicly traded company, is apparently weighing the possibility of going after the second biggest fish in the domestic pond – Charter Communications.

According to CNBC, Altice N.V. chairman and founder Patrick Drahi is lining up bankers to launch a possible takeover of Charter, the second largest cable company in the country, with 17 million video customers. While there is no guarantee Altice would actually make a formal bid, the company has long coveted Charter assets. It was an early bidder for Time Warner Cable in 2015, a prize that Charter eventually won with a bid of more than $80 billion.

Analysts have estimated that any bid for Charter would have to be north of $500 per share to get the company’s attention. That would value the MSO at more than $200 billion.

Charter stock was priced at $401 per share in early trading Wednesday (Aug. 9), up 3% or $11.25 each. The stock settled down later in the day, up 1.4% ($5.41 each) to $395.06 per share. Altice USA stock, which was down 2.3% (71 cents each) to $30.35 per share early Wednesday, was about even at $30.88 each (down 18 cents) later in the day.

Charter has been the subject of merger talk for weeks, with speculation heavy around possible offers being weighed by SoftBank (parent of No. 4 U.S. wireless company Sprint) and Verizon Communications. Charter has declined comment on all of the merger rumors.

Altice USA spun off as a separate public company on June 22, almost exactly one year after closing its purchase of Cablevision Systems on June 21, 2016. Altice USA stock has performed well – it rose 14% in its first two days of trading to $34.30 per share. The stock has settled down since then, but was still above its $30 per share offering price on Wednesday.

Altice USA and its parent are expected to be aggressive buyers of cable properties in the U.S., but Altice N.V. has said it will concentrate on organic growth for the time being.

However, at its rebranding launch in May, Drahi acknowledged past comments where he said being any lower than third in a market wasn’t worth the trouble. With about 4.9 million residential and business customers, Altice USA is the fourth largest cable operator in the country and the eighth largest telecom provider.

“I said, ‘If we are not No. 1, or No. 2, or No. 3, it’s not very exciting,’” Drahi said. “How do you get there? I really don’t know. Or if I do, I can’t say.”

But he later offered a hint at his blueprint for success in other markets.

“I have always been very clear, that first is fixed [networks], then mobile, then content,” Drahi said. “We started in the U.S. with cable. We are too small in cable to go mobile at the moment. But everything is open. We will see.” 

Altice USA set the expected price range of its highly anticipated initial public offering Monday, stating that it expects to issue about 46.6 million shares at between $27 and $31 each, which could raise $1.3 billion to $1.4 billion.

Altice USA, the U.S. arm of European telecom company Altice NV, announced its intention to file for an IPO in April. Altice USA is the fourth largest cable operator in the country, with about 4.6 million subscribers.

In a statement, Altice USA said that of the shares of Altice USA common stock included in the offering, 12.1 million would be offered by Altice USA, 20.9 million would be offered by BC Partners, and 13.6 million would be offered by entities affiliated with the Canada Pension Plan Investment Board ("CPPIB").  BC Partners and CPPIB expect to grant the underwriters a 30-day option to purchase up to 5.2 million Class A common shares.

With the over-allotment, the IPO could raise about $1.6 billion.  

Altice added that it expects the stock will trade on the New York Stock Exchange under the symbol “ATUS.”

J.P. Morgan, Morgan Stanley, Citigroup and Goldman Sachs & Co. LLC are acting as joint book-running managers for the proposed offering and representatives of the underwriters, together with BofA Merrill Lynch, Barclays, BNP Paribas, Credit Agricole CIB, Deutsche Bank Securities and RBC Capital Markets as additional joint bookrunning managers.

Altice USA’s IPO would be the second cable stock offering this year. Last month, Wide Open West launched its IPO at $17 per share, raising about $310 million, which was short of initial expectations.

Altice USA is expected to eventually use its new stock as a deal currency. The cable  company has so far grown its U.S. business through acquisition – Suddenlink Communications in 2015 and Cablevision Systems in 2016  – but has said it will focus this year on organic growth. The company recently underwent a rebranding effort. While most analysts expect the U.S. operation to focus on its current assets for the time being, at the brand relaunch Altice N.V. chairman Patrick Drahi said the company would keep all of its options open.

Bethpage, N.Y. – Shortly after rallying the troops as part of a worldwide rebranding effort, Altice chairman Patrick Drahi told reporters that he was pleased with his company’s purchase of the former Cablevision Systems, and hinted at future moves to come.

Drahi was at Altice USA headquarters here with top executives at the firm as they announced a new logo and tagline “Together Has No Limits.” In addition to speeches by Altice USA chairman and CEO Dexter Goei and Altice CEO Michel Combes, the company beamed presentations by executives in Israel, France, Portugal and the Dominican Republic to its locations worldwide via satellite.

After the presentations, Drahi held court with several reporters representing all the company’s markets.

The U.S. is Altice’s newest market – it purchased Cablevision in June and Suddenlink Communications in December 2015 – and Drahi remembered the criticism he endured especially for the Cablevision purchase, which at $17.7 billion, many analysts believed was too costly.

“I like to prove to the outside world that I am right,” Drahi said of the Cablevision purchase. “When we announced the Cablevision purchase, Altice [stock] crashed. The results we have had and the potential we have are bigger than I thought. Everything we expected when we bought the company has been delivered. And I see more.”

Altice had originally said it would take about $900 million in costs out of the business over several years, a goal many analysts saw as overly ambitious. Recently the company said it had achieved about half of that goal in December.

Over the course of two days executives walked reporters through several of the company’s U.S. businesses, pointing to opportunities in advanced advertising through its cable systems and data analytics firms like Teads and Audience Partners, potential expansion of its hyper-local news channels News 12 Networks and its international news network i24, and its plan to build a state of the art fiber-to-the-home network via its project “Generation Gigaspeed.”

While Optimum has lost about 60,000 video customers between March 31, 2016 and March 31, 2017, it has added about 56,000 broadband subscribers.  At the same time revenue has increased about 6.8% from $1.44 billion to $1.55 billion and cash flow has increased 35% from $441.3 million to $596.8 million. And the company intends to commit “billions of dollars” to building out its fiber network over a period of years, Goei said.

While the initial public offering for its Altice USA business awaits approval, Drahi said he continues to look for intriguing assets. While he would not identify any specific targets, he said he looks everywhere.

“I have discussions with everybody because I am an open guy,” Drahi said. “I like different cultures, so I like to discuss with Israelis, Americans, The Dominican Republic, the French, everybody,” Drahi said. “But you cannot buy everything at the same time. So it depends on what is available, what is the price, what is the future, what do you think about interest rates, what do you think about economics, do you thin Europe is going to recover, do think the US  will grow like that, do you think Israel is better? This is a big part of my decision making”

Drahi mentioned that Altice USA is the fourth largest cable operator in the country and the eight largest telecom provider, ranks that fall short of his past comments that anything lower than third place in a market wasn’t worth being in.

Drahi acknowledged that is US ranking falls short, but added that could change.

“I said, ‘If we are not No. 1, or No. 2, or No. 3, it’s not very exciting,’” Drahi said. “How do you get there? I really don’t know. Or if I do I can’t say.”

But he later offered a hint at is blueprint for success in other markets.

“I have always been very clear, that first is fixed [networks], then mobile, then content,” Drahi said. “We started in the U.S. with cable. We are too small in cable to go mobile at the moment. But everything is open. We will see.” 

Altice, N.V., the European telecom company, pulled the curtain back on a new unified global branding strategy that will bring together its diverse brands under a single name and logo tied to the concept of "One Brand, One Group."

The telecom company, founded by entrepreneur Patrick Drahi in 1993, includes hundreds of diverse brands in the telecom, wireless and cable field in Europe, the U.S. and the Caribbean. Beginning Wednesday the company plans to embark on a year-long process that will culminate in its telecommunications brands to share the same Altice brand.

Related: Altice USA Files IPO Documents

The process also will include a new logo for the company, developed by a unit of advertising and branding giant Publicis Group. Called “the path,” the logo is in the shape of a lower-case “a,” without borders or background, which the company said represents “Altice’s timeless aspirations to continuously innovate and reinvent the future to meet customers’ evolving needs. It reinforces the strength of the Altice brand, and the path which Altice and its customers take together to experience the future.”

The new brand and logo will also get a new tagline, "Together Has No Limits," which the company said proclaims its vision.

Related: Altice USA Looks to Expand Content Reach

Altice CEO Michel Combes told reporters the rebranding will be complete by the end of the second quarter of 2018 and is expected to affect its commercial telecom operations worldwide. Most brands will initially share the Altice brand to give consumers a chance to get used to the name, including its U.S. properties.

While the Altice USA name will remain for its U.S. cable properties, Optimum, its operations in the New York Metropolitan area, and Suddenlink, its cable operations in the Midwest, would share the new brand as “Optimum: by Altice” or “Suddenlink: by Altice,” or something like it until the transition is complete.

“One group with one brand, Altice,” Combes said in a statement. “Altice is today entering a new era, following its transformation into a global leader in telecoms, content and advertising. Operating as one unified organization, Altice will reinvent the future of the customer experience through an enduring commitment to deliver innovative, best-in-class products and services that unlock the limitless potential of our customers and our people. This is our path, this is the Altice path.”

Some brands won’t see a change. Altice said its telecom sub-brands in certain areas -- including Red in France; Moche, Uzo and Sapo in Portugal; Next TV in Israel; the media news brands (News 12 Networks, i24NEWS, BFM, RMC); press brands of SFR Presse (Libération, L’Express, etc.), and Teads -- will not change.

“Altice has a global vision, a clear strategy and a track record of success, and Altice USA is pleased to stand together with its colleagues around the world under one common brand,” Altice USA chairman and CEO Dexter Goei said in a statement. “Today represents a new beginning on our path as we continue to deliver innovative, high- quality, customer-centric products and solutions that connect our customers to the world around them. As one global Altice brand, we believe anything is possible.”

Altice USA chairman and CEO Dexter Goei isn’t looking to make any immediate major changes as its $17.7 billion purchase of Cablevision Systems comes to a conclusion.

Instead, the head of the fourth largest cable operator in the country with about 4.6 million subscribers in 20 states is going to take his time in whittling two medium-sized operators – Altice purchased 1.5-million subscriber Suddenlink Communications in December – into the lean, efficient machine that Altice N.V. founder Patrick Drahi envisioned when he first agreed to buy the cable company back in September.

Goei, who gave up the CEO spot at Altice N.V., the European cable, telecom and wireless magnate, to take the top spot at the U.S. cable operations, said Job 1 will be to continue to intertwine the various Suddenlink and Cablevision management teams adapt to Altice’s way of thinking and the things the company wants to achieve. After that, the focus will be on operations, combining the various back office units and making sure both companies are using the same suppliers and equipment. That, he said, should take the next six months.

Altice USA has named some of its top officers already. Joining Goei at Altice USA are co-president and chief financial officer Charles Stewart and co-president and chief operating officer Hakim Boubazine. Former Cablevision employees making the transition included Lisa Rosenblum, general counsel; Lee Schroeder as head of government affairs; Media Sales president Ed Renicker, chief accounting officer Victoria Mink; and News 12 Networks president Patrick Dolan. Altice USA named former Comcast/NBCUniversal exec Michael Schreiber chief content officer last week.

On the operations side, former Cablevision SVP of infrastructure engineering Pragash Pillai will head up the Optimum operations, while David Gilles, former Suddenlink SVP of operations, Southwest region, will head up the Suddenlink unit. Former Suddenlink president of commercial and advertising operations  Kevin Stephens is president of business services, and former Suddenlink chief technology officer Terry Cordova becomes CTO for the entire company.

Rounding out the top executives, Suddenlink SVP of sales Gregg Graff will become head of residential sales; former Cablevision SVP of branding Matthew Lake will be chief marketing officer; Cablevision CIO Keith Sherwell becomes CIO of Altice USA; and former Cablevision SVP of human resources Colleen Schmidt will be head of human resources and talent development.

For the time being, the Optimum and Suddenlink brands will remain the same.

“We’ve got a lot of work ahead of us for the next six months, really getting ready for 2017, where hopefully we’ll show our colors even more than we do today,” Goei said.

One of the biggest questions ever since the deal was first announced was how Altice was going to extract $900 million in costs from Cablevision’s business. Goei said those cost savings will come over a span of four to five years and will involve some easy wins like reducing corporate overhead and more efficiently managing the business. Others will have a longer time line, like upgrading the networks and the customer experience with new home equipment and determining which vendors to use.

“Those things take time,” Goei said, adding that the financial goal is to double Cablevision’s cash flow margins from its current 20% to more than 40% over the next five years.

Some critics have said that the only way to achieve its cost cutting goal is to decimate customer service. Goei said that couldn’t be further from the truth: “Why would we ever do that? Why would we ever make our customers unhappy that they would want to churn and go somewhere else? That’s not what we’re talking about. This is not about doing large cuts in the workforce.”

As part of the approval process, Altice promised the New York State Public Service Commission that it would not cut any customer-facing jobs for four years after the deal closes. That should keep the customer service force intact for at least that time.

While the NYS PSC took its time in finally approving the deal, Altice moved relatively smoothly through the regulatory process, winning Federal Communications Commission approval in May with few conditions and getting the nod from the New Jersey Board of Public Utilities later that month.

But at the same time, the federal government appears to be cracking down on cable service, particularly on the broadband side, reaffirming net-neutrality rules last week and going forward with an “unlock the box” set-top proposal that has had heavy pushback from the industry. Despite the potentially onerous regulatory environment, Goei said he wasn’t concerned. As a European telecom service provider, Altice is all too familiar with sometime overzealous regulatory agencies.

“Nothing really surprises us from a regulatory standpoint, given how aggressive the European regulators are,” he said.

And though a  newcomer to the U.S. cable business, Goei added that Altice has its roots in entrepreneurship – Drahi grew up on the streets of Morocco and built a global telecom empire before he was 52 years old, modeling his business in part after John Malone’s Liberty Media.

“I would line him [Drahi] up with any other entrepreneur out there,” Goei said.

Goei himself has a an interesting background – the son of a Beverly Hills obstetrician, he received a degree in Foreign Service from the Edmund A. Walsh School of Foreign Service at Georgetown University in 1993. He joined Altice in 2009 after 15 years as an investment banker with J.P. Morgan and Morgan Stanley.

Drahi also is replacing another legendary entrepreneur, Cablevision founder and chairman Charles Dolan. As one of the founding members of the modern cable industry, Dolan had his hand in practically every major development in the cable business in the past 50 years, from the formation of Home Box Office to the advent of broadband. But as acquisitions and consolidation has taken hold, that club has dwindled in size.

Altice USA could help whittle down that list even further – it has said it would be interested in acquiring other cable operations, especially Cox Communications – but not in the short term, Goei said.

“Absolutely not today,” Goei said of other acquisitions. “We’re very focused on integrating our business. 2016 was a year of integration and operation. Thereafter we’ll see. It would be an outright misdirection to tell you we won’t acquire something again. But we are not focused on that today.”

Altice announced a reorganization of its group management structure as the company nears the close of its proposed acquisition of Cablevision Systems.

Among the moves, Dexter Goei has been tapped as chairman and CEO of Altice USA and president of Altice N.V., and named Michel Combes to the post of CEO of Altice N.V.

Earlier, also in expectation of the growing U.S. video business, Altice named former Comcast and NBCUniversal executive Michael Schreiber as chief content officer.

Combes, the former CEO of Alcatel-Lucent (now part of Nokia), joined Altice as COO in September 2015. In his new role, Combes will continue his day-to-day responsibilities for Altice Group and have all operating affiliates, country CEOs and corporate functions report to him. Combes will also join the Altice N.V. board as director.

Goei stepped down as CEO of Altice N.V. to focus on the integration of Cablevision and Suddenlink (acquired by Altice in late 2015), the company said.

Goei, who will also replace Patrick Drahi as president of Altice N.V. and continue to lead its global M&A activities, is also tasked with the further development of Altice’s U.S. division.

Drahi, a founder a controlling shareholder of Altice, will continue to head up the strategic, operational and technology agenda for the group, and will lead a newly-formed Altice Group Advisory Council, the company said.

Altice said the revised structure “is reflective of the global presence of Altice N.V. centered around Europe and the US and ensures critical senior leadership, entrepreneurial spirit and best-in-class management in both regions.”

The reorganization comes just days after the New York State Public Service Commission approved, with conditions, Altice’s proposed purchase of Cablevision Systems, removing a final hurdle in the $17.7 billion deal.

“I am extremely excited about our U.S. business which is accounting for approximately 40% of our group and offers huge development opportunities,” Drahi said in a statement. “Dexter exemplifies the entrepreneurial and commercial spirit of Altice and will provide the same vital leadership to our U.S. business he displayed when building the Altice Group in the last 8 years with me.

“Since joining us last year,” Drahi continued, “Michel has been instrumental in structuring and harmonizing our operations and strengthening our management teams across the board. I am very pleased to work with him in his new role as the Altice Group embarks on its next phase of development. I look with full confidence into the future: the Altice Group has never been in a stronger position.”

After a year dominated by news of a rise in pay TV subscriber losses, the emergence of “skinny bundles,” falling ratings for programmers and the continued consolidation of cable distribution, several top analysts said they believe 2016 will be a year when the media business begins to sort out its top priorities.

Telsey Advisory Group media analyst Tom Eagan believes ratings measurement — especially Nielsen’s release of its Total Audience Measurement product — could be a game-changer by offering accurate viewer data across content platforms. Falling ratings have hammered networks across the board as younger viewers move to mobile devices to watch content. With the ability to track those viewers, Total Audience Measurement could change that.

“Maybe we’ll see ratings be flat to up in 2016,” Eagan said. “We’ll know some of that when they roll this [Total Audience Measurement] out and when we see negotiations start in earnest for the upfronts in April. We may actually see a slowing down of the ratings declines, which have been occurring for the past three or four years.”

Being able to accurately measure viewing across all platforms and devices will be the final nail in the coffin for the old media business model, Eagan added.

“The old media model on the content side, which was roll out as many cable networks as you can because you’re going to get affiliate fees, is no longer the model,” he said. “You don’t want to have any weak links in your media stable.”

THE DISTRIBUTION DEALS

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak said obtaining regulatory approval for the biggest merger deals of the year — Charter- Time Warner Cable and Altice’s purchases of Cablevision Systems and Suddenlink Communications — will be the top stories of 2016, but for a different reason than most suspect.

Wlodarczak said the industry will watch the Altice deals closely on the cost synergy fronts. Altice has said it believes it can squeeze $900 million in costs from Cablevision and another $215 million from Suddenlink, figures some analysts have said are too high. (The Federal Communications Commission gave the nod to Altice’s Suddenlink acquisition on Dec. 18.)

“If they do have the magic cost-cutting bullet, then others in the industry can implement the same strategies to boost EBITDA [earnings before interest, taxes, depreciation and amortization] margins,” Wlodarczak said.

As far as Charter, Wlodarczak said cable operators will be watching closely to see if bringing CEO Tom Rutledge’s business strategies to the combined entity will eventually drive low double-digit cash flow growth in 2017 and beyond.

The emergence of skinny bundles — smaller programming packages for cheaper prices — also made a big splash this year, with Verizon Communications’s FiOS TV Custom TV package, and are expected to continue to be news in 2016. FiOS Custom TV includes 45 channels — minus ESPN — for $54.95 per month initially, stepping up to $84.95 per month after a year. Subscribers also can choose from other programming packages, grouped by genres like Lifestyle, Entertainment, News & Info, Pop Culture, Kids and Sports, for an additional $10 per month.

Skinny bundles caused a bit of a stir at first — ESPN sued Verizon over dropping it from the Custom TV lineup — but haven’t really taken hold yet, mainly because existing programming contracts make it hard for distributors to break up the existing “fat” bundle. And several cable CEOs have said customers may come in inquiring about skinny packages, but the vast majority end up taking the full product suite.

Still, some over-the-top services like Dish Network’s Sling TV, which offers about 23 networks (including ESPN) for $20 per month in a single stream, have claimed success. Others, like Verizon’s go90 mobile-only service and Sony’s PlayStation Vue, are still searching for a market.

Eagan said skinny bundles could end up diluting demand for OTT.

CORD-CUTTING, SHAVING

Subscribing to skinny bundles “is the same as cord-shaving, but it’s voluntary cord-shaving,” Eagan said. “I think it will help offset the popularity of some of the OTT bundles.”

The emergence of more OTT players coincided with an acceleration in cord-cutting in Q2 and Q3, but cable operators were largely spared, due mainly to cable’s dominance in the broadband arena.

The rollout of DOCSIS 3.1, expected in the second half of the year and offering cable customers 1 Gigabit-per-second to 10-Gbps speeds, should help solidify that dominance, Wlodarczak added.

With cord-cutting not as big a concern for cable operators, MoffettNathanson principal and senior media analyst Craig Moffett said he believes the biggest overhang on the stocks will be the fear that Comcast or other operators will participate in the upcoming federal spectrum auctions as buyers.

“In the past, dalliances with wireless have been a significant negative for the stock, and we suspect some of the recent weakness in the shares owes to fears of reckless spending on either spectrum itself or on a network thereafter,” Moffett wrote, adding that it “is honestly not something we worry too much about.”

European telecom giant Altice’s plans to squeeze $900 million in cost synergies from Cablevision Systems hit a bit of a speed bump after the U.S. cable operator released a financial forecast that calls for a nearly 4% rise in capital expenditures over the next four years.

Cablevision filed a proxy statement on Nov. 16 concerning its Altice merger, outlining revenue and cost projections for the next five years.

According to the proxy, Cablevision expects revenue to rise 6.4% between 2016 and 2019, and adjusted operating cash flow (AOCF) to grow 4.4% during that period, lower than some analyst expectations.

But the biggest surprise was on the capital expenditure line. Cablevision estimated capex would increase 3.6% from $908 million in 2016 to $941 million in 2019, which some analysts said could put a damper on Altice’s cost-cutting plans.

“This higher capex outlook is noteworthy given Altice’s expectation for $900 million in targeted cost savings ($150 million in capex), which we believe may hamper investment and impair long-term revenue growth,” Morgan Stanley media analyst Ben Swinburne said in a research note.

Altice agreed in September to purchase Cablevision in a cash and assumed debt transaction valued at $17.7 billion, or about $34.90 per share.

Key to the deal is Altice’s ability to extract cost savings from Cablevision, something it had done with great success in deals with French wireless company SFR and cable operator Numericable. But analysts and investors have been skeptical about synergies Altice chairman Patrick Drahi has said he could achieve.

Altice’s $900 million target is $100 million more than Charter Communications believes it can extract from Time Warner Cable, a company three times Cablevision’s size. Other analysts have said such extensive cost cuts would decimate customer service and plant maintenance.

For his part, Drahi has said he could achieve those savings by streamlining Cablevision’s network and eliminating high salaries. But, according to the proxy statement, several top executives stand to reap huge paydays if they don’t stay with the company after the deal.

And the decision by Cablevision’s controlling stockholders — the Dolan family, led by chairman and founder Charles and his son, CEO James — to receive cash instead of Altice stock has proven to be very smart. Altice stock, at 12.94 euros on Nov. 24 is down about 60% from its midsummer highs of about 33.16 euros. With more than 65.5 million Cablevision shares, the Dolans stand to reap about $2.3 billion.

Altice chairman Patrick Drahi made a sizeable donation to create a new wing of French-Israeli high school at Mikveh Israel. As a result of the donation, the school will be renamed in honor of his parents Marcel and Lucette Drahi.

Present at the cornerstone laying ceremony on Nov. 23 were Drahi’s family, his parents, Naftali Bennett, Minister of Education; Patrick Maisonnave, French ambassador to Israel; Marc Eisenberg, President of Alliance Israélite Universelle; Gabi Ashkenazi, Chairman of the Rashi Foundation and former Chief of Staff of the Israel Defense Forces; Ilan Cohen, Chairman of Mikve Israel ; Sam Pinto, President of Kol Israel Haverim; and other distinguished French and Israeli guests.

In addition to Patrick Drahi’s generous contribution, the expansion of the building is being carried out in partnership with the Israeli Ministry of Education, the French Government, the Rashi Foundation and Kol Israel Haverim.

The school was founded in 2007 with the help of the French and Israeli governments and was established on the values of “Kol Israel Haverim-Alliance.” Its aim is to respond to the particular needs of students from France and Israel. Israeli students receive added value from studying French language and culture, while the French students gain the opportunity to study Hebrew and experience Israeli culture.

Marcel and Lucette Drahi met and married when they were both mathematics teachers at the Alliance school in Casablanca, Morocco and have had long careers in education.

The Patrick and Lina Drahi Foundation supports projects in France, Israel and other countries in Europe especially in the fields of education, scientific research and the promotion of the Arts.

Earlier this year Altice agreed to purchase Suddenlink Communications in a deal valued at $9.1 billion and Cablevision Systems in a transaction worth $17.7 billion.

Liberty Media chairman John Malone said he doubted that Altice chairman Patrick Drahi will be able to achieve the cost synergies he has claimed in his $17.7 billion purchase of Cablevision Systems, adding that the European telecom company risks damaging the cable company’s competitive position.

In announcing its deal with Cablevision in September, Altice said it expected to extract $900 million in cost synergies from Cablevision over time, a figure many analysts said was overly optimistic. At an industry conference shortly after the announcement, Drahi offered more detail, saying the telco could remove amplifiers and other electronics from the network to make it more efficient. 

At Liberty Media’s investor day in New York, Malone said that Altice will be able to extract some synergies from Cablevision; the level they have been talking about would be hard to achieve.

Malone said Altice had tremendous success in its purchase of French wireless company SFR, and applying cable operating tenets to the much more loosely run wireless business resulted in big savings. But teh cable business is a lot different than the wireless business.

“I suspect he [Drahi] is being pretty aggressive in his projection of savings in his Cablevision transaction,” Malone said. “I think he will find some efficiencies, but I would be very surprised if he could generate operating savings at the level that had been talked about without damaging his competitive position in the market place. New York in particular is a tough market.”

He noted that Cablevision has a deep-pocketed, high-quality competitor in New York – Verizon’s FiOS TV.

“I think Patrick will end up being fine, but I doubt that he’ll generate as strong a wealth-building enterprise as he’s predicted,” Malone said.

Charter Communications CEO Tom Rutledge, who presented at the Liberty conference and ran Cablevision as chief operating officer for almost a decade, added that Drahi may be applying European operating metrics to the U.S. industry, which have  much higher content costs. He added that if you put cable operating margins in the European model, they would work out to be more than 50%. Drahi has complained that Cablevision’s margins are in the 32% range.

“When you take out all of that stuff, I think you have comparable margins,” Rutledge said. “Some of the things Patrick said involved taking out electronics from the network. These are multi-year projects. To assume you could do that in one fell swoop I think is really difficult. Could it be done through time? Possibly, with investment.”

Liberty CEO Greg Maffei added that he has told Altice CEO Dexter Goei, a long-time friend, that there are three ways Altice’s entrance in the U.S. cable market could play out.

“Either you’re going to do something really well and we’re going to learn and be better for it and we’re going to go to school, or you’re going to do something really well and get so wealthy that you can buy us for a really big price, or you’re going to fail in which case we’re going to buy you cheap,” Maffei said. “All three of those scenarios are actually pretty additive for Charter.”

RELATED: Dolans to Drahi: Cash and Carry

With the stroke of his pen, the maverick European telecom mogul Patrick Drahi cemented Altice’s U.S. foothold as the fourth-largest cable operator with a $17.7 billion, all-cash deal to purchase Cablevision Systems, one of cable’s oldest family-owned companies.

The Cablevision deal comes on the heels of Altice’s pending $9.1 billion purchase of Suddenlink Communications, a midsized operator with 1.2 million customers in the Southwest and Midwest. With Cablevision, Drahi’s Altice gets 2.7 million cable customers in the country’s largest market — metropolitan New York City, specifically the Bronx, parts of Brooklyn, Long Island, and parts of New Jersey and Connecticut — and overnight becomes the largest foreign owner of a U.S. cable MSO, with 4 million subscribers.

But Altice’s speedy ascension up the cable ranks — it had no U.S. presence six months ago — brings with it vast uncertainties. And while chairman Patrick Drahi believes he can better run a U.S. cable business by applying European cost disciplines, some analysts believe he will face big challenges.

“Six months ago, we were nonexistent,” Drahi said at the Goldman Sachs Communacopia conference, adding that the new company still has more room to grow.

“This is moving fast, but we’re not in a hurry,” Drahi said. “There are more opportunities to consolidate at these same prices.”

Most analysts agree that Cablevision could be the tip of the iceberg for Altice.

“In our view, clearly Altice is not done with its acquisition strategy, and this could include any telco assets not nailed down,” wrote Pivotal Research CEO and senior media & communications analyst Jeff Wlodarczak.

Critics immediately centered on the deal’s high price — it works out to about 9.5 times cash flow, not including synergies, and 6.1 times with synergies — and what many have said are unrealistic cost-cutting goals. Typical deals are in the range of 7 to 8 times cash flow.

In a blog post, MoffettNathanson principal and senior analyst Craig Moffett said squeezing $900 million in cost synergies from Cablevision could be a chore, especially since Charter Communications has said it will derive about $800 million in cost synergies in its merger with Time Warner Cable, a company about five times larger than Cablevision.

“Cost reductions like those won’t just mean cutting SG&A,” Moffett wrote. “It will mean slashing customer service; repair and maintenance; and sales and marketing (specifically, channel-mix optimization and back-office upgrades). It’s hard not to imagine that that might have at least some impact on market share.”

Altice is one of the most rapidly growing telecom companies in Europe. Based in the Netherlands, it spent about $28 billion on deals in 2014 alone. Altice has about 3.1 million cable customers in France and Israel and more than 20 million wireless customers across Europe.

Altice has managed to squeeze profits out of its businesses with a “slash-and-burn approach,” drastically reducing head count, eliminating what it says are unnecessary costs and aggressively negotiating contracts with suppliers.

Drahi said he also sees savings in electricity costs, by eliminating amplifiers in the network, and in shifting more of the sales function online.

“My model is to bring U.S. ARPU to Europe and the European expense to the U.S.,” Drahi said.

The recipe is simple, Drahi added — control excess costs and the cash flow will take care of itself.

Altice also sees cost-cutting opportunities in employee salaries. CEO Dexter Goei said more than 300 Cablevision employees make $300,000 per year or more.

“I understand that,” Goei said at the conference. “There’s a new sheriff in town. We will probably run things a little differently.”

Still, cost containment wasn’t Cablevision’s only problem. The company has been bleeding subscribers in the past few years after a strong period of growth in the early 2000s. According to Moffett, video subscriber losses in two key areas — the New York boroughs of the Bronx and Brooklyn — have accelerated to 6% and 8% in the past quarter, indicating that Cablevision’s competitive position against Verizon Communications’s FiOS TV is worse than it has been letting on.

Verizon chairman and CEO Lowell McAdam told CNBC’s David Faber last week that he welcomes Altice as a competitor, adding that while Drahi talks tough, he’s heard it before.

“Success in Europe or Asia doesn’t necessarily mean success in the U.S.,” McAdam told CNBC. “Our product, fundamentally, is superior when you have fiber into the home versus any of the DOCSIS products. We welcome them into the market.”

Drahi’s strategy hasn’t quite been solidified yet, but he hinted that higher prices for broadband and more flexible video packaging could be a path. “I think broadband is too cheap,” he said.

In a research note, Moffett said that higher broadband prices may be the only way Altice can offset video losses.

“Verizon’s FiOS brand managers must be licking their chops,” Moffett wrote.

Patrick Drahi’s Altice NV has made another big splash in U.S. cable, agreeing to pay $17.7 billion for Cablevision Systems,  a deal that will vault the European telco (when coupled with its $9.1 billion acquisition of Suddenlink Communication) in to the No.4 spot among cable operators in the country. The fact that Drahi has done it so fast – they announced the Suddenlink deal in May – and his whirlwind string of European telco deals over the past few years have drawn obvious comparison to cable legend John Malone. Drahi himself has made the comparison and Malone has expressed admiration for the Altice chairman (mainly in Drahi’s ability to do deals almost exclusively with stock).

There is no doubt that Drahi, a French-Morroccan who lives in Switzerland but runs a company based in the Netherlands, has been successful – he’s No. 60 on the Forbes list of richest humans. But with Cablevision the telecom executive has strayed a bit from the template, agreeing to pay about $10 billion in cash for Cablevision and assume another $7.7 billion in debt. The fact that Cablevision insisted on a cash payout seems to say that the Dolan family was not too optimistic that Altice’s stock – more than double its price of a year ago, solely on its deal acumen – may not be able to sustain its current rate. Typically cable operators push for deals that have a heavy stock component to avoid the tax hit.

Altice has been more than willing to pay top dollar for cable assets – it paid more than 9 times forward looking cash flow for Suddenlink (minus synergies) and the Cablevision deal, depending on how you slice it, is valued at about 9.5 times cash flow, more than a full turn higher than past deals in the 7 times  to 8 times range.

While Drahi himself has said he has modeled his business life after Malone, to me at least, his first two forays into the U.S. cable business look a lot like another former cable billionaire, Microsoft co-founder Paul Allen. Think about it. Allen burst on the scene in the late 1990s, flush with cash from his Microsoft stock and hell-bent on making his vision of a “Wired World” a reality.

The cable market was a bit like it is today – in turmoil, with companies scrambling to acquire others in a quest to better cluster their operations. Allen came in during the peak of consolidation – around the time Tele-Communications Inc. was acquired by AT&T – buying Marcus Cable for $2.8 billion and Charter Communications for $4.5 billion in 1998, later paying huge prices for cable properties all over the map. Some deals were good, some were bad, but most of them were for too much money. At one point, Charter was using almost all of its cash flow just to service its debt, a reality that eventually led it into bankruptcy in 2009. Charter emerged from that hole about a year later, Allen left in 2011 and with new management and a fresh balance sheet is one of the most highly respected cable operators in the country and the leader of the latest consolidation wave.

I don’t mean to bash Allen. He’s a very smart guy and his Wired World vision wasn’t off base, just maybe a little ahead of its time. But the cable graveyard is littered with smart guys with good intentions – AT&T’s Mike Armstrong and AOL’s Steve Case are just a few.  The hard fact is that cable isn’t just  the phone business (like Armstrong learned) and it isn’t just the dial-up Internet business and Drahi may soon find out that it isn’t just the wireless business either. Deciding to take the knife to a business that is at another crossroads, with competition coming from over-the-top as well as from traditional sources, requires that the surgeon is very careful with his cuts. Slashing headcount, customer service, repairs, maintenance and marketing indiscriminately could ultimately result in creating a bargain buy for a larger company down the road. Here’s hoping that Drahi and the others that probably will follow him keep that in mind.

European telco Altice didn’t waste any time pushing toward the top of the list among top cable operators, agreeing to purchase Cablevision Systems in a cash and assumed debt deal valued at $17.7 billion.

The deal, expected to close in the first half of 2016, when combined with Altice’s pending acquisition of Suddenlink Communications, will create the fourth largest cable operator in the country with about 4.6 million video customers. In addition to Cablevision’s cable systems in the New York metropolitan area, Altice also will acquire Cablevision’s business services unit Lightpath, its local new operations News 12 and publishing unit Newsday.

The deal brings to an end virtually decades of speculation regarding Cablevision’s ruling Dolan family’s intentions for the cable unit. Over the years the cable operations were rumored to have been sold to Time Warner Cable and other larger operators only to be scrapped at the last minute. The family also unsuccessfully attempted to take the company private three times in the earlier part of the last decade.

“As a family business we are proud to be entrusted by the Dolan family with the ownership of Cablevision and look forward to continuing the pioneering path they have paved for us,” Altice chairman and founder Patrick Drahi said in a statement. “The strategy of Altice in the large and highly strategic US market is reinforced with the acquisition of Cablevision. We will be in a stronger position, as in all other markets in which we operate, to deliver the best services, invest in the most advanced technology, and develop innovative products for the benefit of our customers.”

Cablevision, founded by chairman Charles Dolan in 1973, has been a pioneer in the business – it was the first to successfully launch a $90 triple play and has made countless innovations in the industry.

Lately, Cablevision CEO James Dolan has set the company on a connectivity path, offering cord-cutter packages, and striking deals with over-the-top video companies like Netflix and Hulu.

In the end, it appears the competitive pressures and the consolidation movement that has swept the industry in the wake of Charter Communications’ pending $78.7 billion purchase of Time Warner Cable  forced the company to look for deals. At INTX: The Internet & Television Expo in Chicago in May,  James Dolan told an audience that operators should focus on consolidating markets instead of companies and offered the New York metro market as an example. Asked at the time whether that meant Dolan was putting Cablevision up for sale, the CEO replied that he was “proposing a commune.”

“Since Charles Dolan founded Cablevision in 1973, the Dolan family has been honored to help shepherd our customers and employees through the most extraordinary communications revolution in modern history,” James Dolan said in a statement. “Now, nearly half a century later, the time is right for new ownership of Cablevision and its considerable assets. We believe that Patrick Drahi and Altice will be truly worthy successors, and we look forward to doing all we can to affect this transition for our customers and employees. We expect that Cablevision will be in excellent hands.”

“For the Dolan family, we move forward with AMC Networks and The Madison Square Garden Company – two and, eventually, three public companies – all born of Cablevision and each with brighter prospects today than ever before,” James Dolan continued. “With profound gratitude to our employees, customers and shareholders who have made our vision a reality, the Dolans look forward to continuing this fascinating journey.”

The transaction is to be financed with $14.5 billion of new and existing debt at

Cablevision, cash on hand at Cablevision and $3.3 billion of cash from Altice. BC Partners and CPP Investment Board have an option to participate for up to 30% of the equity of Cablevision. Altice intends to raise equity by issuing Class A shares in connection with funding its portion of the acquisition. Altice has received full financing commitments from JP Morgan, BNP Paribas and Barclays

“We are very excited about our acquisition of Cablevision, which has developed into a pre-eminent cable operator under the steady, long-term ownership of the Dolan Family,” Altice CEO Dexter Goei said in a statement. “This acquisition, our second in the cable sector in the US, is the next step in Altice’s long-term oriented strategy in the US, one of the largest and fastest growing communications markets in the world.”

JP Morgan, BNP Paribas and Barclays acted as financial advisors to Altice. Shearman & Sterling, Covington & Burling, Mayer Brown, Ropes & Gray, De Brauw Blackstone Westbroek and Morris Nichols Arsht & Tunnell acted as legal advisors to Altice.

Given that nothing has come before the FCC, a spokesman declined to comment on the deal, which will get the requisite public-interest review by the agency and an antitrust vetting from Justice.

To the degree that it strengthens Cablevision as a competitor to Comcast, Time Warner Cable (or, if the FCC approves it, Charter-TWC-Bright House Networks) and AT&T-DirecTV, the deal could get a favorable nod.

There is no FCC prohibition on foreign ownership of cable television systems, though there is on CARS stations, the microwave systems used by cable operators.

"The acquisition of Cablevision is a good move for Altice's global media strategy," said Adonis Hoffman, chairman of Business in the Public Interest and former chief of staff to FCC commissioner Mignon Clyburn. "It may also be a good move for U.S. consumers by providing another competitor with scale in the market. Of course, one of the true tests will be how it structures programming.  I would encourage Altice to be very open to independent and diverse programming and content providers, and build in onramps going into the transaction. This would speak volumes to the industry and the regulators on its intention to advance the public interest in programming."

Diversity commitments, usually volunteered by merging parties at the outset, have become a standard element in merger public-interest statements.

“I do not see any regulatory hurdles at this time that would prevent Altice from accomplishing its goal,” Hoffman added. "They will need to run the traps on the Hill, though, where some members might not be as familiar with the company or its ownership."

UPDATE, 11: 45 a.m.: At a press conference after the FCC's monthly meeting, agency chairman Tom Wheeler was asked for his reaction to the proposed deal.

He said he had two reactions. The first was that he had known Chuck Dolan and the Dolan family for decades, and they were "competitors and innovators in the space."

As to the policy issues, he said the commission would take those on in an "open, fast process." Asked about a timeline, he answered, somewhat incredulously, that the deal had only been announced at 2 a.m. the night before and that nothing had yet been filed.

As to whether there were any particular issues with a French (i.e., foreign) company buying Cablevision, Wheeler said a multitude of government agencies involved in national security and telecom — dubbed “team telecom” — reviews all such transactions.

The Team Telecom website offers this description of the organization: "Team Telecom is comprised of staff from the Department of Homeland Security, the Department of Justice, Federal Bureau of Investigation, representatives from the Department of Commerce, the Department of Defense, the Department of State, the Department of Treasury, and the Office of the United States Trade Representative. Based on its review, Team Telecom may have no comment on any application or may request that the FCC condition grant of the application on compliance with assurances made by the applicant in either an exchange of letters or a formal security agreement."

Such reviews usually take six months to a year, but can take less time. In any event, the FCC cannot act on an application until the review is completed.

Washington bureau chief John Eggerton also contributed to this story.

In an expected move, Patrick Drahi's Altice Group said it has inked a deal to sell Portuguese assets Cabovisao and ONI to Apax France, a private equity fund, for an undisclosed sum.

That agreement comes after the European Commission required Altice to shed those assets as a condition of its €7.4bn acquisition of Portugal Telecom from Brazil-based Oi.

Altice said the deal is subject to regulatory review by the EC and Portuguese authorities. Perella Weinberg Partners advised Altice on the transaction.

The asset sale also comes amid Altice’s increasing interest in building up in the U.S., a strategy that’s being led off by Altice's proposed $9.1 billion acquisition of Suddenlink Communications.

Michel Combes, the former CEO of Alcatel-Lucent, was recently named COO of Altice Group and as chairman of the board of Numericable-SFR.

While most people may have a hard time naming three things from Luxembourg (Hint: Jean-Claude Van Damme isn’t one of them), cable operators would be smart to bone up on their knowledge of the tiny country wedged between Belgium, France and Germany, and especially its telecom company, Altice.

Altice burst on the cable consolidation scene Wednesday as the surprise acquirer of Suddenlink Communications and made no bones about its intentions – it wants to be a big part of the consolidation trend in the U.S. cable business. But aside from an unusual name and an obvious appetite for acquisitions, not many people in the U.S. know much about the Luxembourg telecom giant, its executives or its track record. Here are a few things you should know about what could be the next big cable buyer.

1. Its founder Patrick Drahi, a French Moroccan billionaire (motto: "Always Start with Cable"), got his start selling cable subscriptions door to door.

2. Altice has been on an acquisitions binge in the past two years, spending $30B in 2014 alone ($23 billion of that in the purchase of French wireless provider SFR). It has about 3.1 million cable customers (1.6 million in France and 1.1 million in Israel), but more than 20 million wireless subscribers.

3. Drahi, a citizen of France but a resident of Switzerland is ranked 57th among the world’s billionaires, according to Forbes, with a net worth of $16 billion. He has been called the European John Malone (162nd on the Forbes list with a net worth of $8.5 billion)  and his CEO Dexter Goei was picked by Malone investment Charter Communications as a member of the board slate it has proposed for Time Warner Cable before that deal went south.

4. Altice has a simple strategy for its acquisitions – extract greater value by cutting costs significantly and increasing profits. And it has had some success along those lines – it boosted cash flow margins between four and 10 percentage points at operations in Israel, the Dominican Republic and  the Benelux countries last year.  But how it will cut costs in the U.S. is a bit of a mystery. For example, in announcing the Suddenlink deal, Altice said it anticipates about $215 million in cost synergies, but offered no details beyond its track record of cutting costs with other acquisitions. Said Elevation LLC senior TMT strategist Stephen Sweeney in a note to clients:  “There really aren’t the typical administrative and contiguous geographic market costs cuts that you would see in a typical US intra-market deal, so we are somewhat skeptical on ATC’s synergy estimates, particularly with regard to programming expenses.” 

MoffettNathanson principal and senior analyst Craig Moffett put it more bluntly: "The combination of Suddenlink and Altice makes no sense," he wrote. "The idea that there are cross-border synergies in physical network operations is a fantasy. Meanwhile, Suddenlink is a well-run, albeit sub-scale, operator, so neither are there obvious 'fixes' to support higher margins. Altice's $215 million in synergies would suggest that they can cut 27% out of Suddenlink's non-programming/non-franchise costs, or more than $11 per subscrbier per month. We'll take the under."

5. While Altice has grabbed a lot of headlines because of its aggressive deal making, there are some who believe the company may have already bitten off more than it can chew. The Suddenlink deal includes about $1.2 billion in Altice cash, but the rest of the $9.1 billion price is in the form of assumed Suddenlink debt, vendor financing and rolled over debt from the current owners. According to Forbes magazine, at one of Altice’s past targets – French cellular company SFR -- the pressure to cut costs is so bad that some staff have complained of not having toilet paper in its bathrooms or being able to fill its printers with paper.