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Comcast CEO Roberts emerges from Malone shadow as king of cable industry

By Edmund Lee and Alex Sherman
Bloomberg News

Brian Roberts is putting an end to John Malone’s cable cowboy era.

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.

The Comcast executive has 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 and Hulu.

“Look at where the world is and the competition ... 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 attempted to make a strong start with what Comcast calls its X1 television interface. It mimics and in some cases surpasses what Apple and Roku offer, including digital streaming of TV shows and films as well as what is known as computer cloud storage. Comcast, 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,” said Craig Moffett, founder of research firm MoffettNathanson LLC.

“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 Chairman Sumner Redstone, 90, say people familiar with his thinking.

Roberts’ 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.

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’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. 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. The University of Pennsylvania graduate eventually went out on the service trucks, installing TV service in people’s homes.

Roberts wanted to be seen as the white knight in Time Warner Cable’s protracted merger talks with Charter Communications Inc. 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. Roberts swooped in close to the $160 a share Marcus was hoping to get in any deal.

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.

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.


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