The FCC is reportedly looking at the vast, sprawling holdings of Charter Communications' biggest shareholder, John Malone, as it reviews the proposed purchases by Charter (NASDAQ: CHTR) of Time Warner Cable (NYSE: TWC) and Bright House Networks.
According to Bloomberg, the FCC sent queries asking for details about Malone's holdings in media companies including Discovery Networks and Starz, as well as pay-TV companies including Charter, DirecTV (NYSE: T) and Dish Network (NASDAQ: DISH).
"It's hard not to think about Malone when you think about Charter, about all Malone's entanglements," said Rich Greenfield, an analyst with New York-based BTIG, to Bloomberg. "This is one of those challenges they have to get past."
The FCC's letters were sent to the three companies that list Malone as chairman: Liberty Media Corp., QVC own4er Liberty Interactive Corp, and Liberty Broadband. The latter is a major Charter investor.
The agency wants to find out more about things such as Malone's plans for online delivery. And it wants to know soon, setting a Nov. 16 deadline for comment.
"It's a pretty meaningful request," said Greenfield. "You can't have complete confidence" that Charter's deal will be approved, he added. Notably, Greenfield has staked a minority opinion among analysts that the Charter-TWC deal has a strong chance of being rejected by regulators.
Another analyst, MoffettNathanson's Craig Moffett, described the FCC's inquiry as "probably not a big issue."
Malone was recently listed by Forbes as the 68th richest American, with a fortune of around $7.2 billion. He has a 46.6 percent voting interest in Liberty Broadband, which itself will be entitled to vote on no more than 25.01 percent of shares owned by the combined "New Charter" combination of Charter, TWC and Bright House.
- read this Bloomberg story
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