While the Federal Communication Commission's recent approval of AT&T's deal to acquire DIRECTV with only minimal conditions bodes well for Charter Communications (NASDAQ:CHTR) receiving approval for its $55 billion purchase of Time Warner Cable (NYSE:TWC), the company is leaving nothing to chance.
That's a sensible strategy given that the FCC denied Comcast's (NASDAQ:CMCSA) attempt to complete a deal for TWC. Though Charter does not carry the same negative baggage as Comcast with either the FCC or the public and there has been little opposition to the deal, the company is better off being safe than sorry.
As the clock ticks down to an FCC decision, Charter has ramped up its Washington lobbying efforts in order to make sure nothing derails its purchase.
What is Charter doing?
The company has hired four new lobbying firms in Washington, according to The Hill, bringing the total number of lobbyists under contract with the cable company to nine. The new hires include people and firms with relationships on both sides of the aisle:
- Ed Pagano, a partner at law firm Akin Gump Strauss Hauer & Feld who previously worked as deputy assistant to the president for legislative affairs in Barack Obama's administration, is lobbying on the "proposed merger with Time Warner Cable and acquisition of Bright House Networks LLC," according to filings.
- Timothy Kurth, previously a policy advisor to former House Speaker Dennis Hastert (R-Ill.) has signed on to lobby on matters related to mergers and acquisitions.
- Charter has also hired Peck Madigan Jones and the Franklin Square Group as lobbyists.
- Net neutrality advocate Marvin Ammori will consult on the deal and possible conditions that regulators could place on it..
"In general we don't want to find that we're in a crucial part of the process and find that we don't have the resources to do what we need to do," Alex Dudley, Charter's senior vice president of communications, told The Hill.
Is this a good idea?
Charter has to walk a careful line between using its lobbyists to answer questions and subtly push for the deal and flat out being pushy. Comcast tried to use political influence to get its deal through but an unexpected public backlash invalidated those efforts.
Currently, the public at large does not see Charter as a villain in the way it did Comcast. Charter has to be careful to not change that image by pushing too hard or playing politics in a way that rubs people the wrong way.
Simply not being Comcast is a huge advantage here. Nevertheless, Charter is a huge cable and Internet provider with all the negative feelings being in those businesses stirs up with the public. Play this too hard in an attempt to manipulate the process and the blowback could scuttle the deal.
Charter looks to have clear sailing
While it's playing in dangerous waters, Charter appears to be saying the right things. In effect, the St. Louis-based company is playing the "we're just some country folks who need these big city lawyers to answer y'alls questions" routine.
"When we contemplate running a transaction like this through the Washington approval process, we have a staff in D.C. of less than ten," Dudley told The Hill. "When you start to think about how do you go about telling your story to all of the different people who can have an impact on its success inside the Beltway, you look at 10 people and say there is no way we can do that. So we have to get help."
That's a sound strategy as long as the lobbying team doesn't lobby too aggressively. If Charter answers questions, cooperates, and is willing to make some reasonable concessions, there seems to be no reason this deal won't pass.
Daniel Kline has no position in any stocks mentioned. He has always craved federal regulatory approval. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.