By Joe Flint
Brian Roberts' first instinct was right.
When Time Warner Cable Inc. was the target of a hostile takeover
by Charter Communications Inc., the company reached out to Comcast
Corp. in search of a savior.
Mr. Roberts, the chief executive of Comcast, resisted the Time
Warner Cable overtures several times as well as approaches from
Charter, which was looking to partner with Comcast on a deal as
well. Mr. Roberts had only gotten through a long bitter regulatory
battle to acquire programming giant NBCUniversal a few years
earlier.
"They were appropriately worried about the regulatory blowback
from the very beginning," said media analyst Craig Moffett of
MoffettNathanson Research.
There also was a consensus inside Comcast that the nation's
largest cable and broadband provider was strong enough without Time
Warner Cable, the second-largest cable company with 10 million
subscribers.
But the allure of Time Warner Cable's properties in New York
City and Los Angeles ultimately proved irresistible to Comcast. It
would give Mr. Roberts a major presence in the nation's two biggest
cities and be seen as a crowning achievement for his leadership of
the family-run company.
"We view this as a merger that creates a company on the leading
edge of innovation, a company committed to investing in networks,
products and services that deliver the customer the best possible
experiences," Mr. Roberts told analysts on the day the deal was
announced in February 2014.
Instead, the Time Warner Cable deal has become the biggest black
mark on Mr. Roberts' record as a media mogul, surpassing Comcast's
ill-fated $48.7 billion takeover attempt of Walt Disney Co. in
2004. And the biggest question is whether Mr. Roberts will try to
play deal maker again.
Not only did Comcast stumble in judging the regulatory reaction
to its now-failed effort to buy Time Warner Cable, the
audaciousness of the bid rallied opponents of big media and played
a key role in the Federal Communications Commission's decision to
impose tough regulations on the Internet.
"Comcast ended up with the worst of all possible worlds, a less
attractive regulatory regime and no benefit in terms of a closed
transaction," said one media observer.
The company was also made out to be the poster child for bad
customer relations during its pursuit of Time Warner Cable. That
wasn't helped by its own sales representatives who were
embarrassingly caught on tapes that went viral badgering customers
who wanted to drop their service.
The Time Warner Cable deal even led rival AT&T Inc. to agree
to buy satellite broadcaster DirecTV for $48.5 billion, creating a
bigger TV rival. That proposed purchase is on a much stronger
footing with the FCC because it is viewed as more healthy for
competition, according to a person familiar with the matter.
None of these big fumbles fit with the image Mr. Roberts works
so hard to project--that Comcast is a humble company with family
roots and strong values. Comcast was founded by his father Ralph,
who bought a tiny cable system in Tupelo, Miss., and the younger
Mr. Roberts started literally at the bottom--installing cable. He
rose up the ranks and replaced his father as chief executive in
2002.
While Mr. Roberts comes across as mild-mannered, he is a tough
deal maker, once even trying to secretly acquire a controlling
stake of cable mogul John Malone's Tele-Communications Inc. in the
mid-1990s.
Mr. Malone, known as the cable cowboy, was once a mentor to Mr.
Roberts and may now have a window to swoop in and try to accomplish
what Comcast couldn't. Mr. Malone, who controls Liberty Broadband
Corp., Charter's biggest shareholder, has said he would look to buy
Time Warner Cable if the Comcast deal fell apart.
With the media industry left contemplating the domino effect of
a failed deal, Comcast also must plot its next move.
"The reality is, Comcast has an insatiable appetite for deals,"
said Rich Greenfield, a media analyst at BTIG. "I always like to
call them the insatiable Roberts family. They've got to do
something."
While Mr. Greenfield thinks the next target for Comcast would be
a wireless carrier like T-Mobile US or Sprint Corp., Mr. Moffett
thinks Mr. Roberts will lay low, at least in the U.S.
"It's very hard to imagine Comcast doing any substantive mergers
and acquisitions for the moment," Mr. Moffett said. "I think it
would be viewed as unnecessarily provocative by the Federal
Communications Commission and Justice Department."
One potential target for Philadelphia-based Comcast could be
Liberty Global, Mr. Malone's international cable company that has
56 million video, voice and Internet subscribers. "One would have
to think they would at least have a passing interest in Liberty
Global," Mr. Moffett wrote in a report issued Thursday.
That would be the ultimate irony, as Mr. Malone contemplates
picking up the pieces following Mr. Roberts' Time Warner Cable
fumble.
Keach Hagey contributed to this article
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