FOR IMMEDIATE RELEASE: December 7, 2015
Communications Workers of America Files Objections to Altice-Cablevision Deal
700,000 Member Union Says Deal Will Lead to Outsourcing, Too Much Debt, Cites Moody’s Concerns About Debt
Washington, DC – The Communications Workers of America (CWA), a 700,000 member union that represents Cablevision employees in Brooklyn, filed official objections today with the Federal Communications Commission arguing that the proposed sale of Cablevision to Dutch company Altice was not in the public interest. The union pointed to the $8.6 billion in debt that Altice was taking on, which will lead to downsizing, and its track record of refusing to pay its contractors and outsourcing.
“Altice’s track record in France and Portugal clearly shows the danger this deal poses to Cablevision’s customers and employees,” said Dennis Trainor, Vice President of Communications Workers of America District 1. “Altice takes on too much debt, outsources as much work as possible and then downsizes its workforce. Customers get worse service and employees lose their job. Unless Altice makes commitments to protect customer service and Cablevision employees, the FCC should reject this deal.”
Altice has outlined plans to take on $8.6 billion in debt to finance the deal – on top of Cablevision’s existing $5.9 billion in debt. This level of debt will require such deep cost cutting at Cablevision that both staffing and network investments are likely to suffer, to the detriment of both consumers and workers. As a result of the heavy debt financing, Moody’s immediately put Cablevision under review for downgrade, noting that its eye-popping debt level of 8x earnings (debt/EBIDTA ratio) “creates risk for a company in a capital intensive, competitive industry.”
According to the filing, Altice’s planned $1.05 billion cuts in operating expenses and capital expenditures will likely lead to significantly worse customer service. This has been the experience in France, where Deutsche Bank reports that over the past year (3Q2014 to 3Q2015), Altice-owned Numericable-SFR lost 1.256 million mobile subscribers (5.4 percent of subscribers), 246,000 retail broadband subscribers (3.7 percent of subscribers), and 719,000 home connections (7.2 percent of subscribers).
In addition, in France and Portugal Altice has a troubling track record of refusing to pay its contractors. Recently, two Altice companies were fined €375,000 ($410,000) each (or $820,000 total) for not paying its contractors.
The CWA also plans to weigh in with the New York State Public Service Commission, the New York City Franchise Concession Review Committee and the Connecticut Public Utilities Regulatory Authority, all of whom will play a role in reviewing the deal.
The Communications Workers of America represents 300 Cablevision employees who successfully negotiated a contract with Cablevision in February 2015 after a multi-year fight with the company.
CWA represents 700,000 workers in telecommunications, media, airlines, public service and manufacturing.