Classic Comcast Dealmaking


Comcast's apparent interest in buying control of NBC Universal shows that, after a dormant period, cable's top card players are still in the game.

This deal is far from done, and could be undone if a third player, Vivendi Entertainment, opts against selling its 20% stake in NBCU back to NBCU. Comcast's stock decline this week since the news reports about its talks with NBCU parent General Electric shows investors would rather Comcast not spend cash and take on debt for these programming assets. Bernstein Research said Friday it viewed the evolving deal “as a net negative” for Comcast.

But after a decade of creative, crafty deals that vaulted Comcast from the fourth largest cable provider to the industry leader, Brian Roberts & Co. aren't likely to turn back once they've identified assets they want and a way to get them that won't break the bank.

On the cable-system side, a stealthy, long-range approach worked in prizing plum assets away from Jones Intercable and Lenfest Communications, via deals with third parties (Bell Canada and AT&T). In 2001, Comcast wore down AT&T's resistance to buy the telco's 13 million cable subscribers and gain numerical dominance.

Chief operating officer Steve Burke said this month Comcast has enough cable heft. It likes the combination of cable operations and programming. “If the opportunity came about where we could add cable content to our portfolio, I think we would do it,” he said at an investors conference.

Because he said Comcast wouldn't do a “big $50 billion acquisition,” that seemed to rule out NBCU. Comcast's dealmakers see a middle path, apparently involving some cash (maybe $6 billion), some debt (maybe $10 billion to $12 billion), current programming assets (E!, Golf Channel, regional sports networks, etc.) and a joint venture structure to avoid taxes. Even with the cash outlay and new debt, Comcast would keep its investment grade rating and still hike its dividend, Bernstein said.

A textbook Comcast maneuver — one that, once again, shows Roberts's belief in the cable business and, as Bernstein noted, would help him gain leverage over the evolution of online video and on-demand movie distribution.

Will he win this time? I wouldn't bet against him.