Earlier this week, Charter Communications, Inc., “a Fortune 500 company and the fourth-largest cable operator in the United States,” became Governor Malloy’s ‘Next Five’ Corporate Welfare recipients. With revenue of $1.9 billion during the last financial quarter, the company did lose $83 million, but that was an improvement over the same quarter the year before, when Charter lost $107 million.
For most of us, not enough revenue to cover expenses poses a problem. As I can attest, banks seem to frown on giving, or even loaning money to people whose income is deemed inadequate or insufficient.
But we don’t call our economic system “advanced capitalism” for nothing.
In return for promising to create 200 jobs, Charter will receive a taxpayer-funded 10-year loan of $6.5 million with an interest rate of 2 percent. Even better, the Connecticut Department of Economic Development will defer principal payments for the first three years. If the company does create the jobs, the entire loan will be forgiven.
The St. Louis Business Journal wrote a detailed article following the announcement. The good news for them is that the company has said that moving its corporate headquarters will not lead to any lay-offs. In fact, apparently without any state funds, Charter’s social media specialist explained that the company will be adding 300 new jobs in their St. Louis offices.
Ten years ago, Charter purchased their present St, Louis headquarters for $43.5 million. With approximately 16,800 employees nationwide, about 3,000 of Charter’s employees are now working in St. Louis.
According to Governor Malloy’s press release, Charter is the ninth company to participate in the “Next Five” Corporate Welfare program, which is one of a number of economic development programs administered by the Connecticut Department of Economic and Community Development (DECD).
The press release explains that the $6.5 million will go toward Charter’s costs for tenant improvements and the purchase of furnishings and office equipment. Considering the company will start with about 100 employees at the site, those keeping track will realize that our taxpayer subsidy equates to about $65,000 worth of furniture and improvements per employee.
The Stamford location must come as especially good news to Charter’s new chief executive officer, chief operating officer and chief marketing officer. All three left Cablevision Systems Corporation in Bethpage, New York, earlier this year, but never moved their homes to St. Louis.
As an aside, the final sentence of the Governor’s press release states that the package, “also includes funding provisions for future job growth,” but for some unknown reason, it doesn’t quite get to explaining what that might mean.