McAdams On: Comcast Taking NBCU
12/4/2009 3:39:07 PM
Consolidation critics are already all over the
Comcast-NBCU deal, mostly because it’s a doozey. The NBCU acquisition gives the
Roberts family an unprecedented chunk of the nation’s video media pipeline, but
that’s not necessarily a bad thing.
All feelings about media consolidation aside, the Robertses know how to run a
business. They know the meaning of due diligence and they’ve pulled assets out
of the dregs before. AT&T was being dragged down by its cable TV business
before Comcast picked it up in 2002. The margins on that business improved, in
part because Comcast doesn’t just buy businesses to prop up faltering legacy
assets. The company actually invests the resources necessary to get the best
performance from an asset.
Comcast generally has an operational strategy going in that consists of more
than generalized assumptions about synergy--the type that took AOL Time Warner
to the ground. One of the first things Comcast does is start communicating that
strategy to employees of acquired companies, who are supplied with the
resources to achieve it.
Additionally, Comcast is run by executives who are hardly corporate Visigoths.
They’re not starving, to be sure. Brian Roberts received $23.7 million in total
compensation last year, less than 1 percent of the company’s reported net
income of $2.5 billion. But neither Brian Roberts nor any of the Comcast
executive team are known for outlandish personal lifestyles and spending. They
belong more in the category of consummate deal-makers like John Malone, the
Liberty Media chief who has a penchant for tooling around in an RV full of
pugs. Roberts and his deputy, Steve Burke, are easily among the most forthright
and non-egotistical lads in the media industry.
I remember once e-mailing Brian Roberts that I’d become his mother’s fan after
seeing her on a local cable access show encouraging older women to belly dance
for exercise. He was clearly proud of her and thanked me.
The Comcast suite has agglomerated and made successful the nation’s largest
cable operation through attention and acumen. They are likely to do the same
with NBCU, which Jeffrey Immelt at GE liked well enough when it needed no
attention. Now, Immelt can concentrate on light bulbs and rockets, and NBCU can
be run by guys that focus exclusively on media.
The combined assets of Comcast and NBCU include more than 24 million pay TV
subscribers, 15.7 million broadband and 6.5 million VoIP customers; two
broadcast networks, 26 TV stations, cable networks CNBC, MSNBC, USA, Bravo
SyFy, E! Entertainment, Style, Golf Channel, Versus, G4, TV One, PBS Kids
Sprout, New England Cable News Network, 10 regional sports networks, two
professional sports teams, two movie studios TV production and syndication as
well as various other retail and entertainment interests.
The deal is expected to give Comcast annual revenues of $50 billion--roughly
equivalent to the gross domestic product of Bulgaria. In case there’s any
question, this is what is meant by the term, “Comcastic.”
It’s certainly not ideal that so much American media is controlled by so few,
but there are arguably few that can sustain it anymore. If the alternative to
media consolidation is fewer outlets, nothing is gained. The Comcast-NBCU
marriage will cause all sorts of noise in Washington, D.C., but it will go
through, the dust will settle and the Roberts family will buy DirecTV, Google