Time Warner Cable Earnings Call Insights: Impact of Initiatives and the Dodgers Deal

Time Warner Cable Inc (NYSE:TWC) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Impact of Initiatives

Douglas Mitchelson – Deutsche Bank: I guess a question for Rob, how meaningfully and how quickly kind of the initiatives you outlined impact customer churn?

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Robert D. Marcus – President and COO: Doug it’s a great question and my expectation is that certain of these initiatives that are very execution oriented can have an impact right away. Others will take some time to actually manifest themselves, things that relate to customer satisfaction reducing churn volume or churn cost in the first instance will unquestionably take a longer time to have an impact, execution related changes I think and have a more immediate impact, but the goal is to work it on both fronts and my hope is that we see a better outcome throughout 2013.

Douglas Mitchelson – Deutsche Bank: Yes, I mean the follow-up would be I mean I know you don’t like talking about potential future video subscriber levels, but given a commentary you had improvements in each of the last three quarters. The other initiatives you have underway. I mean I think people are going to leave this call with the expectation at video sub losses are going to start to improve into 2013. Is that fair or is it really too early to gauge that?

Robert D. Marcus – President and COO: It’s what we are striving for but it’s early to gauge any full-year results.

The Dodgers Deal

Jessica Reif-Cohen – Bank of America Merrill Lynch: I was hoping you could give us some color on your newest RSN – what can you say about the economics of the Dodgers RSN and how different is it from the Lakers economics which you actually own?

Irene M. Esteves – EVP and CFO: The Dodgers deal is similar in economics to the Lakers deal in that we are guaranteed access to important sports programming over a long period of time. And our objective here is it was with the Lakers is to ensure that access to programming at a certain cost. And we think over the long term this will be a lower cost alternative than if we had not guaranteed those rights for the 25-year period.

Glenn A. Britt – Chairman and CEO: I just want to emphasize one thing that Irene just said. We do not pretend that these deals are inexpensive or cheap, and our sense is that if we are going to carry these gains, they are going to be expensive however we get them. So, what we think we’ve done with these deals is to minimize and stabilize the cost over a long time period, but we are not trying to pretend that first year is really, really cheap or anything.

Jessica Reif-Cohen – Bank of America Merrill Lynch: But is this why margins are coming down in 2013?

Irene M. Esteves – EVP and CFO: It really doesn’t impact us, Jessica, until 2014.

Jessica Reif-Cohen – Bank of America Merrill Lynch: All right, okay. But can you say anything about the first year impact?

Irene M. Esteves – EVP and CFO: It should be minimal. We might have a little bit of startup cost, but it’s really a ’14 impact.

A Closer Look: Time Warner Cable Earnings Cheat Sheet>>