New York – Altice chairman Patrick Drahi told a packed house at the Goldman Sachs Communacopia conference Thursday that he plans to take a European approach to the U.S. cable business by keeping a keen eye on costs and boosting margins.
“My model is to bring U.S. ARPU to Europe and the European expense to the U.S.,” Drahi said at the conference. At about $158.52 per customer per month, Cablevision has one of the highest ARPUs [average monthly revenue per unit] in the cable business.
Altice agreed on Thursday to purchase Cablevision in a cash and assumed debt in a deal valued at $17.7 billion. The deal, which represents about a 9-times cash flow multiple before costs synergies and about 6 times after an estimated $900 million in cost synergies. Those cost synergies have been controversial – they are about $100 million more than the $800 million Charter expects from its purchase of Time Warner Cable, a company about five times larger than Cablevision. At about 14% of revenue, some analysts have said the cost synergies are aggressive at best, impossible at most.