At least three times during the last year, Comcast Corp. was asked to be the white knight.
But Brian Roberts said no.
The chairman and chief executive of cable giant Comcast initially rebuffed Time Warner Cable Inc.’s requests to combine the nation’s two largest cable companies. Comcast was still digesting its acquisition of NBCUniversal, and the company had been telling Wall Street that it didn’t need to buy any more cable systems to be successful.
But the pleas accelerated as Time Warner Cable tried to fend off a hostile takeover and turned to Roberts to be its white knight. The beleaguered cable operator had lost 300,000 subscribers during last summer’s blackout of CBS stations during an ill-fated battle over programming fees.
Blood was in the water. And Roberts’ lieutenants urged him to go for it.
“I just looked in the mirror and said: ‘If you are going to be an innovator, and if your products are not available in L.A. and New York, then will you truly be a great company?’ “ Roberts said during an interview at Comcast’s gleaming headquarters, the tallest tower in Philadelphia.
Building “a great company” has been a driving motivation of the Roberts family for more than 50 years.
Roberts’ father made a living in the 1950s selling men’s cologne, belts and suspenders. Then Ralph Roberts took a chance on what he saw as the next big thing. In 1963, he plunked down $250,000 to buy a Tupelo, Miss., community TV antenna system with 1,200 customers willing to pay for clear television signals.
The family has spent the past two decades on an aggressive buying spree, rolling up one company after another to build Comcast into one of the world’s most powerful corporations. Comcast now is the nation’s largest cable company, with more than 22 million subscribers and $64 billion a year in revenue.
Brian Roberts is looking to fortify his company for an increasingly competitive era. He believes that the $45 billion takeover of Time Warner Cable will help do that, particularly as major technology companies, including Google, Apple and Amazon.com, try to crowd into America’s living rooms to control the TV-watching experience.
He still needs the blessing of federal regulators, who are expected to decide early next year. If they approve, Comcast would be a dominant provider of cable TV and Internet service – an increasingly vital connection for tens of millions of families – along the nation’s East and West coasts. It would gain 7 million subscribers and claim two major pieces on the chessboard, Los Angeles and New York, an audacious move even for a company known for its daring bets.
Comcast would command the major population centers: New York, L.A., Chicago, Boston, Philadelphia, Washington, Atlanta, Dallas, Seattle and San Francisco. In Los Angeles, Comcast would become the sole cable TV operator, with reach into nearly 1.8 million homes.
The deal would complete Comcast’s transformation into a national company from a regional cable operator, all of it done without having to dig trenches and extend its fiber lines through every state.
“Something closer to world domination” was how veteran cable analyst Craig Moffett described Comcast’s ambitions.
Roberts, who turned 55 recently, does not come across as a power-hungry CEO. Instead, he is bookish and polite, with a dry sense of humor.
He possesses a quiet confidence that business associates say comes from his strong relationship with his father — and the corporate structure of Comcast. Roberts controls 33 percent of the company’s voting shares, which means that he doesn’t have to worry about being bounced out of the CEO office. He can take the long view.
Roberts has spent his entire career at Comcast. In high school, he trained as a cable installer in western Pennsylvania, climbing poles and learning to pull wires into homes. He joined the company full-time after graduating from the Wharton School at the University of Pennsylvania.
Roberts became the company’s president at age 30. He took over as CEO in 2002, just as Comcast was absorbing another huge acquisition, AT&T Broadband. That $47.5 billion purchase turned Comcast into the nation’s largest cable operator.
His 94-year-old father, Ralph, still makes it into the office.
Brian Roberts’ initial reluctance to bid for Time Warner Cable was based, in part, on worries that it would be inviting trouble.
He knew another big grab by Comcast would give ammunition to business rivals, consumer groups and even federal regulators who might consider stricter rules for the cable industry.
And the criticism came swiftly. During a congressional hearing this spring, a leading consumer advocate described Comcast as “a nationwide octopus with massive tentacles” capable of squeezing customers.
Susan Crawford, a visiting professor at Harvard Law School, agreed with that characterization.
“It will be like having Godzilla and Shamu merge – the company will be so enormous,” she said.
Comcast has been relentlessly expanding at a time when other media companies have been slimming down.
Its biggest prize to date has been its acquisition of NBCUniversal, one of the nation’s premier entertainment companies. It includes the NBC broadcast network; cable TV channels USA Network, Bravo, E!, CNBC, MSNBC and Golf Channel; Spanish-language Telemundo; and Fandango, an Internet movie ticketing service. NBCUniversal has a huge presence in Los Angeles, owning movie studio Universal Pictures, Universal Studios theme park and KNBC-TV Channel 4.
“If you look at the majority of deals that we’ve done over the years, we have always out-hustled everyone else,” said Steve Burke, who joined Comcast 16 years ago and now is chief executive of NBCUniversal. “Brian was the guy who stepped up to make it happen. He’s playing a really long game.”