Comcast CEO Roberts Emerges From Malone Shadow as King of Cable
The Comcast Corp. CEO, who secured a deal to buy Time Warner Cable Inc. for $45.2 billion in stock, has long operated in the shadow of Malone, the Liberty Media Corp. chairman and billionaire investor who helped to establish the U.S. cable industry and has long dominated it with a forceful personality.
No longer. Roberts has spent at least $91 billion acquiring companies in the past dozen years, including the $52 billion purchase of AT&T Inc.’s cable business in 2002. If his purchase of Time Warner Cable is approved, that would bring his acquisition tally to at least $136 billion.
By thwarting Malone’s attempts to get his hands on Time Warner Cable and with NBCUniversal already in his pocket, Roberts also has emerged with the power to reshape the cable-media landscape. On a conference call yesterday, the Comcast chief characterized the Time Warner Cable deal as a crucial step toward modernizing cable, which has struggled to match the viewing experience from such upstarts as Netflix Inc. and Hulu.
“Look at where the world is, and the competition and you see is coming from national companies and many cases international companies,” Roberts said. “There’s an opportunity to invent new products and services.”
Roberts has already made a strong start with Comcast’s X1 TV interface. It mimics and in some cases surpasses what Apple Inc. and Roku offer, including digital streaming of TV shows and films as well as cloud storage. Comcast, which is based in Philadelphia, also recently started selling downloadable movies and TV shows much the way Apple does via the Apple TV box.
“Brian Roberts is a fascinating combination of technology visionary and business strategist,” Craig Moffett, founder of research firm MoffettNathanson LLC, said in an interview.
“He saw the major technology developments of the industry well ahead of everyone else and has positioned his company brilliantly to take advantage,” he said.
Roberts, 54, has always wanted to be seen as a major media mogul in the mold of Malone or Viacom Inc. Chairman Sumner Redstone, 90, say people familiar with his thinking who asked not to be named because they considered the matter confidential.
Roberts’s ambitions partly explain why he tried to buy Disney in 2004 and why he put the Comcast name on the GE building after acquiring NBCUniversal from General Electric Co.
Nor has he shied away from tussling with Malone, 72. In the mid-1990s, the two engaged in a power struggle over Tele-Communications Inc., once America’s largest cable provider. In a bid to outfox Malone, Roberts worked with Bill Gates, then Microsoft Corp.’s CEO, to buy up a bloc of supervoting shares owned by the company’s late founder.
While the Roberts-Gates tactic failed, Malone considered their move duplicitous, according to Mark Robichaux’s book “Cable Cowboy: John Malone and the Rise of the Modern Cable Business.”
“They screwed me,” he said of both Roberts and Gates.
AT&T acquired the cable company in 1999.
While he has gained a reputation for big ambitions and a history of sparring with Malone, Roberts has also struggled to shake a silver-spoon image, people with knowledge of the matter said. As the son of Ralph Roberts, who founded Comcast in 1963, he inherited what would become the largest cable company in the U.S.
Brian Roberts idolizes his father, a self-made man, and at age 15 he started working as a Comcast intern. He eventually went out on the service trucks, installing TV service in people’s homes. The University of Pennsylvania graduate was an accomplished squash player and helped his team beat Harvard in a key match that his coach, Al Molloy, prefaced with: “This is the Harvard match. You’ll remember it the rest of your life. Do whatever you have to do to win.” He did.
Roberts wanted to be seen as the white knight in Time Warner Cable’s protracted merger talks with Charter Communications Inc., according to one of the people. Time Warner Cable CEO Rob Marcus had rejected Charter’s offer of $132.50 a share. Marcus preferred Comcast to Charter, which was being backed by Malone, according to two of the people. Roberts swooped in last week to make an offer that came very close to the $160 a share Marcus was hoping to get in any deal.
“I’m very enthusiastic about this,” Marcus said in the conference call. “Comcast is a great partner to have.”
Buying the second-largest U.S cable-TV company adds more than 11 million residential subscribers to Comcast’s 21 million-plus video customers. It also gives Comcast access to the New York City cable market and more bargaining power with content providers, said Bill Smead, chief investment officer at Smead Capital Management.
Roberts gets programming too, including Time Warner Cable’s regional sports networks and news stations, including Time Warner Cable News NY1, popular with Manhattan residents.
Even so, his new toy is not problem-free. Time Warner Cable shed about 825,000 TV users, or 6.8 percent of its customer base last year, more than Comcast or any other cable provider. Last year, a fee dispute with CBS Corp. led to a monthlong blackout, which contributed to the departure of 306,000 customers in the third quarter. Time Warner Cable ranks last among pay-TV services as rated by the American Customer Satisfaction Index. Comcast is second to last.
What’s more, Comcast’s enhanced scale won’t necessarily help it overcome the upper hand held by content producers in licensing renewals, especially since Comcast already owns NBC, according to Moffett.
Still, he’s sanguine about Roberts’s prospects.
“Brian Roberts is once again making a bold move to buy Time Warner Cable,” he said. “And history suggests it would be a mistake to bet against him.”
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