Altice's Drahi promises Euro-like austerity at Cablevision: 'I don't like to pay big salaries,' he says

Speaking to a packed Goldman Sachs Communicopia conference meeting room yesterday, just hours after his company announced a $17.7 billion agreement to buy Cablevision (NYSE: CVC), Altice SA mastermind Patrick Drahi laid out his plan to drive margins as high as 50 percent with his new MSO. Drahi told analysts that he can make the company's Cablevision deal work by finding about $1 billion a year in savings and synergies. 

That will start with driving down executive salaries at Cablevision (NYSE: CVC), a company that paid its founding family, the Dolans, more than $100 million last year alone.

"I don't like to pay salaries," Drahi said during the event, according to reports. "I pay as little as I can … No one in our company is making more than a couple hundred thousand [dollars] a year."

Drahi noted the "many layers of people who are very highly paid" at Cablevision. Indeed, Altice CEO Dexter Goei said at the event that there are more than 300 Cablevision employees who make $300,000 or more a year. "There's a new sheriff in town," he said. "We will probably run things a little differently."

With Cablevision touting an industry-leading average revenue per customer of $158.52, Drahi added, "My model is to bring U.S. ARPU to Europe and the European expense to the U.S."

Drahi added that he plans to cut additional costs by improving Cablevision's network. Specifically, he said the MSO would push fiber into the home and eliminate amplifiers and other electronic equipment.

"Cablevision has 5 million homes passed in a very dense area around New York, which is half what Numericable has in France," Drahi said. "So the cost of running this network should be around half the cost of running a network in France. It is three time [larger]. That is a problem."

Drahi also said Altice will keep buying U.S. cable systems before it moves onto focusing on wireless acquisitions.

"We are too small," he said of the company's U.S. operations. Altice also has plans to buy Suddenlink in the United States. "We'll see if we can buy more cable systems before we go to mobile."

Asked which operators Altice will be targeting, he said, "All of them." Analysts have speculated that Altice could pursue Cable One or Mediacom as acquisitions in the cable arena, and perhaps T-Mobile US in the wireless space.

For more:
- read this Bloomberg report
- see this Multichannel News article
- read this Deadline Hollywood story

Related articles:
Sold! Cablevision to go to Patrick Drahi's Altice for $17.7B
Altice has 'lofty synergy expectations' for Cablevision buy, says it will beat Comcast on margins
Cable analysts: Altice's Drahi will target Cablevision, Cox, Mediacom

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