Business

Suite revenge

It’s the Tom Rutledge show.

Wall Street is fired up about consolidation in the cable industry and is betting on the Charter Communications chief to lead the latest deal-making — potentially a merger involving Cablevision or Time Warner Cable.

A shrewd operator, Rutledge was a top executive at both companies before joining Charter and led the industry with innovations such as the “triple play” bundle of video, Internet and phone service.

Although Charter is half the size of Time Warner, the fourth-largest pay TV provider, Wall Street would like to see the two combined under the leadership of Rutledge.

CEO Glenn Britt is rumored to be retiring at the end of this year amid growing concerns about the company’s lagging performance. The front-runner to succeed him, Time Warner Cable’s COO Rob Marcus, has waited years to ascend to the throne.

“The idea of Rutledge is intimidating for them,” said a well-placed cable source. “Rutledge is the guy who came up with triple play.”

Cablevision CEO Jim Dolan has even more cause for hand-wringing. After a successful decade as cable president, Rutledge exited Cablevision at the end of 2011 following a turf war with Dolan’s wife, Kristin Dolan, according to several sources.

Since then Cablevision has limped along, while Charter has risen. Charter stock has more than doubled since Rutledge’s arrival in February 2012, while Cablevision rose just 4 percent over the same period.

All the deal talk has even put Cablevision patriarch Chuck Dolan in “listening mode” after years of resisting a tie-up with Time Warner Cable, according to a source.

Media mogul John Malone, who led a wave of consolidation in the cable industry in the 1980s and 1990s, has made Rutledge his point man for a big cable play, calling Charter a “horizontal acquisition machine.”

Malone’s Liberty Media, which owns a 27 percent stake in Charter, has reportedly reached out to Time Warner about the benefits of industry consolidation.

There are plenty of reasons for the cable guys to put aside their differences. Just about everyone who wants cable has it, and the business has been losing traditional pay-TV subscribers.

Meanwhile, cable operators are looking at increased programming costs and so-called retransmission fees. A recent rash of TV station mergers, including Gannett’s move to buy Belo last week, could further jack up “retrans” fees for cable operators.

At the same time, cable’s biggest competitors are pursuing their own strategic deals. DirecTV, for instance, is in the mix to buy streaming TV service Hulu.

“There is going to be consolidation,” said Jessica Reif Cohen, a top media analyst at Bank of America Merrill Lynch. “There are cost savings, corporate overhead, it’s why Liberty came back to the US business.

“There are other drivers, the industry is getting excited about growth prospects.”