Comcast CEO Brian Roberts, whose company is in talks to form a joint entertainment venture with NBC Universal, is striving “to grab cable channels without sacrificing the cash payouts his investors demand,”
Bloomberg reported:
Investors have pressed Roberts for cash returns and don’t support a major content acquisition, according to Craig Moffett, an analyst at Sanford C. Bernstein & Co. Roberts reinstated Comcast’s dividend in 2008 after almost a decade’s hiatus and raised it by 8 percent in February. He’s negotiating a plan that wouldn’t affect the payout or stock buybacks…. The approach incorporates investor concerns without tempering his strategic ambitions.
Under the deal, Comcast-controlled companies would produce and distribute movies and cable TV shows and would provide entertainment for websites,
the
Philadelphia Inquirer
reported:
It would be the largest company of its time and seems to re-create the former Time Warner Inc. media empire.
The plan is “fragile”; it would raise antitrust issues and “could easily collapse because of its complexity,” the
Inquirer
article said.
Comcast’s failed bid for Walt Disney Co. five years ago “probably taught Roberts to avoid hostile takeovers,” one observer told Bloomberg.
An equity analyst told the
Inquirer
that Roberts “never lived Disney down”:
“He surprised everybody with it. From that point forward, there has always been the question as to what he would do with the cash from the cable business.”
Brian Roberts, the son of Comcast founder Ralph Roberts, became CEO in 2002, after Comcast acquired AT&T Corp.’s cable systems and almost tripled in size, the Bloomberg report noted
Since Roberts became CEO in November 2002, Comcast shares have declined 10 percent, adjusted for a three-for-two stock split in February 2007.
The
Inquirer
report said the NBC Universal deal
is more modest than the Disney bid and comes as Roberts seems deeply concerned about the impact of the Internet on the cable TV business… Comcast’s greatest fear is that cable TV customers migrate to the Internet and cancel their cable TV subscriptions.
(Sources: Bloomberg, Oct. 2, 2009;
Philadelphia Inquirer,
Oct. 2, 2009.)
-
683 reads