Comcast to Invest $4 Billion in New Firm With CFO AngelakisCécile Daurat and Gerry Smith
Comcast Corp. is creating a new company with Chief Financial Officer Michael J. Angelakis that will focus on investments in growth businesses around the world.
The new firm will have capital commitments of as much as $4.1 billion, with $4 billion coming from Philadelphia-based Comcast. Angelakis, 50, who joined the largest U.S. cable company in 2007, will invest at least $40 million personally, according to a statement today.
Technology giants like Cisco Systems Inc., Intel Corp. and Google Inc. have used venture funds to reap financial returns while also incubating startups focused on promising new technologies and businesses. In this case, Angelakis may have sought a career move at the same time Comcast was looking for investment opportunities, said Andrew Hamerling, a money manager at Wavelength Asset Management LLC, which owns shares in Comcast and Time Warner Cable.
The CFO, who will remain a senior adviser when a successor is found, is taking a new role while Comcast still awaits regulatory approval for its $45.2 billion plan to buy Time Warner Cable Inc. Angelakis will assist with the transition to the new finance chief and begin the integration process for the Time Warner Cable deal.
“Michael is highly respected on Wall Street for both his financial and strategic capabilities,” said Paul Sweeney, an analyst at Bloomberg Intelligence. “The financial backing from Comcast appears to be a very attractive opportunity for him.”
The new firm will make much larger investments than Comcast’s existing venture capital arm, Comcast Ventures, which typically spends as much as $15 million on early-stage companies, said a person familiar with a plan who asked not to be identified because the matter is private. Angelakis will look for later-stage businesses both in the U.S. and internationally, the person said.
The shares fell 0.3 percent to $56.47 at the close in New York. They’d dropped 2.4 percent through Monday, as the Standard & Poor’s 500 Index gained 1.3 percent.
The new company will have an exclusive, 10-year partnership with Comcast as sole outside investor.
Angelakis, who is deputy chairman of the Federal Reserve Bank of Philadelphia, will get annual compensation of $8 million as chief executive officer of the new company, and $100,000 as Comcast’s senior adviser, according to a filing. Before joining Comcast as co-CFO eight years ago, he was a managing director at Providence Equity Partners, a private equity firm investing in technology, media and communications businesses.
“The ability to establish entrepreneurial ventures that partner with and participate in the growth of innovative companies can be an important driver of strategic and financial value creation for our company,” Comcast Chief Executive Officer Brian L. Roberts said in the statement.
Angelakis is moving on as the pay-TV industry goes through disruption. With more video programming being offered through online services like Netflix and Amazon, the number of Americans signing up for traditional packages of dozens of channels is slowing. And companies including Dish Network Corp. are further threatening the model with cheaper Web offers.
Comcast, which also owns NBC broadcast network, cable networks like USA, the Universal film studio and a stake in Hulu, has meanwhile been ramping up its broadband offerings to fuel sales growth.
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