Emailing "Charter Expected to File for Bankruptcy by April 1"
Hindsight is 20/20, but it looks now as if Paul Allen should have sold Charter Communications some time ago. He considered doing so as long ago as [August, 2007](http://www.reuters.com/article/mergersNews/idUSN1528496320070815).
More recently, the [rumors](http://atlanta.bizjournals.com/atlanta/stories/2009/02/02/daily33.html) have been bankruptcy, and today it was [confirmed](http://www.marketwatch.com/news/story/charter-file-bankruptcy-april-1/story.aspx?guid={14171E23-A3D2-4740-ADDE-024BB74F80D6}&dist=msr_1) that Charter Communications will file for Chapter 11.
Marketwatch notes that poor management caused problems:
Earlier in this decade, Charter was hurt more badly than its cable competitors by satellite broadcasters. The company had many systems that were late in adopting state-of-the art two-way capability, and the satellite companies targeted Charter systems in those areas. It also had a poor customer service reputation that it has had to work hard to overcome.
I would add that Paul Allen's involvement did not help the company. Customers -- and possibly even managers -- assumed that the company could lose money forever. It has, in fact, [not made a profit since 1999](http://pulse2.com/2009/01/29/paul-allens-7-billion-charter-investment-down-the-toilet/).
The company has over $20 billion in debt and insufficient cash to make payments. The problems have been visible for some time. In 2007, the [article](http://www.reuters.com/article/mergersNews/idUSN1528496320070815) also linked to above noted that the company was, "highly leveraged, with $19.6 billion in long-term debt and $81 million in cash on hand."
Yahoo Finance shows [Charter](http://finance.yahoo.com/q/bs?s=CHTR&annual) with $22.553 billion in debt, more than Allen can repay by himself (compared to $14.666 billion in assets). Cablevision, which is about 5/6 the size of Charter in terms of [subscribers](http://www.isp-planet.com/research/rankings/usa.html), has $9.140 billion in assets and $14.239 billion in debt. That's a similar debt level.
The key difference? Profitability and customer service.
Look at BroadbandReports' [ratings](http://www.dslreports.com/gbu). Cablevision's Optimum Online service gets a B- for customer support and a B+ for the overall rating (value for money). The B- is not good, but it's far superior to Charter. Charter gets a C for tech support and a C for value for money.
Then there's profitability. Full year data is available for 2007, not 2008. In 2007, Cablevision reported net income of $218 million. In 2007, Charter reported a net loss of $1.616 billion.
If Charter cannot solve its profitability issues and customer service problems, this bankruptcy will only be the first of many.