Cable Operators

The Accountant Who Helped Build an Empire

5/23/2011 12:01 AM Eastern

There are few people who have
left a more indelible mark on the cable industry
than Julian Brodsky.

As one of the founders of Comcast Corp.,
Brodsky helped build one of the most successful
and influential media and entertainment
businesses in the world. His financial
acumen, imagination and zeal opened doors
that enabled Comcast and the industry to expand,
grow and enter new
businesses.

He has been a stalwart
crusader for the cable industry
on Wall Street; a mentor
to countless cable executives;
and is one of the most
well-liked and respected titans
in the business. As he
steps down from his position
as non-executive vice chairman
of Comcast (he retired
as vice chairman in 2004),
Brodsky leaves a legacy that
will be felt by the entire cable
industry for years to come.

As a young accountant,
Brodsky had helped Ralph
Roberts sell his suspender
company and continued to
assist him with new investments
— not because there
was a lot to do, but because
he simply liked the softspoken,
charming Roberts.
When Dan Aaron, Comcast’s
third co-founder, convinced
Roberts to buy the
Tupelo, Miss., cable system,
Brodsky immediately wanted
in. He quit his job with
the accounting firm he was
working for and announced
to Roberts and Aaron they
weren’t embarking on their
cable journey without him.

The offices were already
cramped and there wasn’t
room for one more person,
much less a 6-foot-four,
200-pounds-plus guy with
a booming baritone. That
didn’t stop Brodsky, who
brought in a card table from
home and set up shop.

Brodsky, Aaron and Roberts were completely
different in style and personality, but the
three men made a great team. Aaron ran the
systems; Roberts was the smooth-talking chap
who sought out properties and franchises; and
Brodsky was the financial brains of the bunch.

“We never made a move without a unanimous
vote by all three partners,” Brodsky told
Multichannel News last week. “Nothing tops
the partnership between Dan, Ralph and I.”

In his 2001 memoir, Take the Measure of the
Man: An American Success Story
(Veritas Press),
Aaron likened the trio to three guys trying to
drive a car at the same time. Brodsky was always
stepping on the gas; Aaron was always pounding
on the brakes; and Roberts was calmly steering
the wheel. It sounds chaotic, and even a bit
dangerous, but it worked. The partners began
buying as many properties as possible.

‘IRON FINANCIAL DISCIPLINE’

“We never saw a cable company we didn’t like,”
Brodsky has always been
fond of saying. The partners
bought existing systems, unbuilt
franchises and some
companies with both.

“We always played bigger
than we were,” Brodsky
said. “But we could because
we had an iron financial
discipline. We never had a
financial crunch. We never
missed a payment. There
were no scandals. I never
lost a night’s sleep over our
financial health.” (Ralph
Roberts is now chairman
emeritus of the company;
Aaron died in 2003.)

Comcast went out on a
limb to buy Storer Communications,
but lost the
bidding to the much larger,
well-connected privateequity
firm Kohlberg, Kravis
& Roberts in 1984. The
company’s reputation and
standing as a “player” rose
substantially in the process,
because “it showed
we had gumption and
drive,” Brodsky said.

It wasn’t long before
Brodsky and his partners
found themselves as
part of a troika with Tele-
Communications Inc. and
Time Inc.’s American Television
& Communications
to buy Group W Cable’s 1.9
million subscribers from
Westinghouse Broadcasting
for about $1.7 billion.

Comcast was clearly the
smallest dog in the pack, but Brodsky’s financial flair — not to mention his
thundering-yet-friendly bark — was crucial in
sealing the deal. Comcast’s share of the Group
W subscriber pie — 520,000 customers — doubled
the company’s size overnight. It wouldn’t
be the only time Comcast dramatically changed
its makeup with a single acquisition.

Three years later, Comcast, TCI and Knight
Ridder snagged Storer’s 1.5 million subscribers
for $2.8 billion. The company would go on
to buy Maclean Hunter’s 550,000 customers in
1994; E.W. Scripps’s cable systems, counting
800,000 customers, in 1995; and Jones Intercable,
with its 1.1 million customers, as well as
Prime Cable, with 406,000 subscribers, in 1998.

Comcast tried to buy MediaOne for $60
billion in 1999 but the deal fell apart when
AT&T Broadband bought it instead. Comcast
came away with a $1.5 billion consolation
prize and a deal to buy AT&T systems
that served 2 million customers.

The failed MediaOne deal didn’t diminish
Comcast’s zeal for acquisitions. In 2000, Comcast
bought Lenfest Communications with
its 1.3 million customers and, in 2002, finally
got those coveted MediaOne properties when
it bought AT&T Broadband in a deal valued
at $47 billion. That deal gave Comcast, which
had counted 8.4 million customers at the time,
some 22 million customers in 38 states. All
these transactions required Brodsky’s broad
and savvy financial dexterity. His reputation
as a financial wizard was firmly established.

“I still remember the day when I was an
up and coming analyst, and Julian reached
out and invited me to dinner,” Craig Moffett,
senior analyst with Sanford Bernstein &
Co., recalled. “It was like I had passed some
kind of a test, and now I was being invited
into Julian’s secret fraternity. And it really
was Julian’s fraternity. After a while, you
realized that everything you would write,
Julian had thought of — and done — already.”

FINANCIAL INNOVATOR

To be sure, Brodsky was on the cutting edge
of crafting new and innovative financial deals
from the beginning, said John Alchin, who
worked closely with Brodsky between 1990
and 2007, when he retired as Comcast’s co-
CFO and treasurer. “I don’t know of anyone
who was doing insurance warrant lending or
industrial revenue bonds when Julian was doing
them. His creativity and his understanding
of the financial markets and the various
debt instruments, as well as his ability to tailor
them to meet the needs of the company, is
the cornerstone of his legacy. His ability to be
creative — and I mean that in the most positive
way — took Comcast from its bootstrap
beginnings to the company it is today.”

Brodsky was responsible for a number of
groundbreaking financing techniques including
cable project financing provided
by governmental authorities, commercial
banks and insurance
companies,
the issuance of
convertible debt
on the Eurobond
market; “blind
pool” and “local
investor” limited
partnerships.
He also was one
of, if not the first,
operators to use
private limited
partnerships.

“My good
friend Glenn Jones likes to think he was the
first to use limited partnerships, but we did
it long before he did,” Brodsky said. “I’d seen
how well they worked when I was an accountant
and I saw how many similarities the realestate
business had with cable. I knew it
would translate well and it did. We always
believed in our story. We were willing to try
new things and because we always made
good on our promises, people were willing
to try them with us. Some innovations were
collaborative with ideas coming our way.”

Brodsky has served as a mentor to many industry
players during his 47 years in the business.
Indeed, he has had a significant impact on
the development of so many industry executives
both directly and indirectly “that the industry
will continue to benefit from his influence for
years,” Miller Tabak analyst David Joyce said.
Brodsky’s jovial personality, coupled with
his acute fiscal insight, has made him one of
the industry’s most visible and popular executives.
He was always quick to help explain one
of his complex deals in ways that made it easy
to understand. Alchin credited Brodsky’s uncanny
ability to take complicated issues and
boil them down to their essence as one of the
reasons he’s been so successful over the years.

SET HIGH STANDARDS

“As an analyst, you were always terrified of
disappointing [Brodsky],” Moffett said. “Not
because he would always ‘talk his book’ by
arguing that Comcast was too cheap (you already
knew he thought so), but because you
knew he was disgusted when an analyst just
plain got it wrong. Julian is an incredibly
warm and generous man, but he doesn’t suffer
fools gladly. You never wanted to risk being
cast as one of those fools.”

Brodsky’s broad involvement in the dozens
of deals with which he was involved brought
credibility and in turn, respect from bankers
and investors. The same held true with his
involvement in industry projects and initiatives.
The original organizers of CTAM U. were
thrilled when
Brodsky threw
his support behind
the nascent
managementdevelopment
program, Cable &
Telecommunications
Association
for Marketing
president Char
Beales said. “Julian
joined the
board and immediately
brought
legitimacy to the idea. He has been the heart
and soul of the CTAM U. program.”

Brodsky, who has served as a guide, tutor
and guru to many industry players over the
years, including Brian Roberts, Comcast’s
chairman and CEO. Brodsky took the younger
Roberts under his wing and helped him as
he took the reins of the business in the early 1990s. He has also been
a willing and often eager
teacher to anyone who
asked. As the National
Cable & Telecommunications
Association’s
research and marketing
executive in the mid-
1980s, Beales didn’t know
much about finance when
then-NCTA president sent
her to write the minutes
of one of the trade group’s
Accounting Management
Committee meetings. Brodsky told her he’d
look at her notes after the meeting and help
with anything she didn’t understand.

“I had to go to a number of those meetings
back then, because my notes were so good,”
she said with a laugh.

With the support of Ralph Roberts and
Comcast, Brodsky funded the endowment of
the annual Dan Aaron Lecture for Innovative
Management, which annually features a top
industry figure speaking with a small group of
high-potential executives about the business.

By the time Comcast had swallowed the
whale — AT&T Broadband
counted 13.5 million customers
to Comcast’s 8.4
million subscribers at the
time of the acquisition in
2002 — Brodsky was looking
for a new challenge.

OTHER VENTURES

In 2004, he stepped down
as active vice chairman
and created Comcast Interactive
Capital, overseeing
several high-tech
companies including
Broadbus Technologies Inc.; VoIP companies
CedarPoint Communications and Syndeo
Corp., and interactive-TV developer MetaTV
Inc., among others. While he is not in charge
of the unit that is now called Comcast Ventures
in the wake of Comcast’s merger with
NBCUniversal, Brodsky keeps his fingers in
the pie by sitting on the advisory board.

“I’ve been pulling back for years,” he said.
“It was time to do this now. The board needed
to be mixed up. We needed younger board
members and it needed to be more diverse.
Brian and I talked about it for about three
years. It was time to do something about it.”

Brodsky, an avid traveler and photographer
(he even supplied the photos for this
story), plans to continue traversing the world
with friends and family. He’s also keeping his
eyes peeled for a few new investments and
opportunities, as long as they don’t conflict
with Comcast.

Brodsky sits on the boards of billing provider
Amdocs and mutual fund RBB Fund.

He’s actively involved with the Philadelphia
Museum of Art (he and Alchin are on the board
of trustees) and the Philadelphia Chamber
Music Society, and supports several educational
charities through his family’s foundation. He
will serve as a director emeritus at Comcast for
one year following retirement. And he said he
plans to continue coming into the office a few
days a week, as he has been doing since his
semi-retirement in 2004.