Charter finalizes $34.5-billion Cox takeover, bringing Spectrum to millions more customers

Charter Communications wrapped up its $34.5-billion takeover of Cox Communications early Thursday, picking up millions of new internet and TV customers in Southern California.

By mid-September, customers of the Atlanta-based Cox will see their packages shift to Spectrum. But Charter is giving its new subscribers in Santa Barbara, Palos Verdes, Orange County, San Diego and Las Vegas a treat beginning this weekend: turning on SportsNet LA, the Dodgers-owned channel and ending one of the longest TV sports blackouts ever.

Cox had long refused to carry the TV channel, citing the Dodgers’ high license fees. So customers with Cox service have been unable to watch most of the team’s regular season baseball games for more than a decade.

With the addition of Cox homes, the Stamford, Conn.-based cable company now boasts 35 million customers — making it the nation’s largest broadband internet and cable television provider.

The company will have more than 6 million customers in California. Charter pledged to California regulators that it would operate a consumer-friendly service.

“Together, we will bring the best products, at the best price, coupled with the highest level of customer service to more customers across our expanded 45-state Spectrum footprint,” Charter Chief Executive Chris Winfrey said in a statement.

Cox subscribers will be able to opt for their existing pricing or switch to a Spectrum bundle that includes such apps as Disney+, Hulu, ESPN, AMC+ and Paramount+.

“It is a smooth, thoughtful transition for Cox customers and our new colleagues,” Winfrey said on a conference call with reporters. “Customers will see no changes to their Cox service or pricing and packaging unless they choose to make a change themselves.”

Charter also plans to offer Cox subscribers a year of free service when they switch their cellphone carrier to Spectrum.

It’s been more than a year since the companies unveiled their proposed union. Last week, California’s Public Utilities Commission unanimously approved the merger, lifting the final obstacle in Charter’s path to close the deal. Federal officials had given Charter their consent months ago.

As part of the California pact, Charter promised to offer affordable broadband to low-income residents, including California LifeLine service tiers, for five years. The company agreed to spend at least $275 million to upgrade its California network and complete its 1-gigabit service capability across its legacy Spectrum service areas within three years.

Charter also committed to investing at least $30 million in customer outreach initiatives, such as digital literacy training and device access for low-income communities. The company was also tasked with providing free broadband and Wi-Fi service for schools, libraries and community centers.

Charter’s Winfrey also said the company would provide bill credits for Spectrum internet outages that last two hours or more.

He acknowledged that the merger would bring some layoffs due to overlapping roles of the now merged workforce. Charter alone employs nearly 90,000 workers.

“There will be some changes in functions in terms of what people do,” Winfrey said. “But local field operations … the service and sales functions in the field, I don’t expect any change whatsoever. And in many of those cases, we’re going to be increasing headcount.”

While the deal brings big changes, the Cox name will only go away temporarily.

Next year, Charter will change its corporate name to Cox as a nod to the Cox family — descendants of James M. Cox, an Ohio press baron who began building a publishing empire in 1898 — who are expected to remain significant stockholders. Cox also served as Ohio governor in the early 1900s.

His great grandson, Alex Taylor, who currently serves as chairman and chief executive of the parent Cox Enterprises, will become chairman of the Charter board.

The Spectrum brand will continue. The brand was born a decade ago, after Charter bought Time Warner Cable, which had long served the Los Angeles region.

Charter shares fell 2.6% to $148.40 in midday trading.