Law firm Creighton Bradley & Guzzetta LLC -- consultant to Nashville,
Tenn., and a slew of Midwestern hamlets -- has reviewed new information on the
AT&T Broadband-Comcast Corp. merger but stands by its original, if
singularly held conclusion: It must be rejected.
Communities advised by the Minneapolis firm have delayed their merger-related
franchise-transfer votes, rather than voting to deny the transfers. This was
done so that Comcast could negotiate with the consultant in hopes of reversing
But when the consultant sent clients a supplemental report late in June, the
firm reiterated its conclusions.
The supplemental report compared the transaction that would create AT&T
Comcast Corp. to the 'unbridled corporate growth' -- and subsequent meltdowns --
of Tyco International Ltd., Global Crossing and Enron Corp.
Those companies gobbled up others to become giants by assuming debt, then
used illicit accounting practices to disguise it.
While there is no evidence of nonstandard accounting in the cable deal, the
law firm said it has still not been supplied with projected revenues and the
assumptions supporting them; projected expenses and their assumptions; and
cash-flow projections for the merged company.
Instead, the 'new information' included positive reports by other consultants
and Wall Street sources including Bear Stearns & Co., Merrill Lynch &
Co. and Sanford C. Bernstein & Co., added to the approximately 5,000 pages
of documents already submitted by the company.
'The fatal flaw remains Comcast's and AT&T's steadfast refusal to provide
a business plan from which [local franchising authorities] can extrapolate a
picture of the potential for harm to subscribers and LFAs as a result of this
transaction,' according to the supplemental report obtained by Multichannel
The firm's Tom Creighton was out of town and did not return calls for comment
Nashville, the consultant's largest client, has delayed a vote on the
transfer until August.