Deregulation of the cable industry in 1984 was a big boon for Comcast. The company’s whirl of expansion activity helped it grow from the 20th-largest MSO at the beginning of the decade, with 200,000 subscribers, to more than 2 million subscribers 10 years later.
Indeed, Comcast was launching a new system every six months between 1977 and 1984, according to Brodsky.
But the first mega-deal didn’t come until 1985, when Merrill Lynch teamed up with Comcast to buy Storer Communications. The crew at Merrill was familiar with Brodsky and admired his financial acumen. Comcast was financially stable, its systems were well operated and its vision was long-term and expansive. The Wall Street investors knew a good bet when they saw one.
Comcast and Merrill Lynch lost the bidding war for Storer to Kohlberg, Kravis & Roberts, which agreed to pay $1.6 billion for Storer. But three years later, Storer was back on the block, selling for $2.8 billion to a consortium of Comcast, TCI and Knight Ridder. Comcast got about half of the customers.
Comcast’s daring move with Storer the first time around caught the attention of other industry players. A few weeks after losing Storer to KKR, Brodsky shared a taxi with Stewart Blair, a top aide to Tele-Communications Inc. president John Malone. TCI was the largest MSO at the time and Blair wanted Comcast to partner with TCI to buy Group W Cable, which counted 1.9 million customers.
Recalling the conversation to writer Tom Southwick in his book Distant Signals, Brodsky asked Blair why he wanted Comcast as a partner in the deal. “Because you’re the last guy I want to see coming down the alley the other way on the deal,” Blair told Brodsky.
Brodsky immediately called Roberts to relay the conversation. Roberts had his own interesting tale to tell. Nick Nicholas at Time Inc. inquired whether Comcast would be interested in joining up in a bid for Group W.
TCI, Time Inc. and Comcast ended up working together to buy Group W’s cable operations for $1.7 billion. Each company got about 500,000 customers out of the deal.
Comcast was a big believer in programming, and in 1986 it made its first big investment in content, putting $380 million into home-shopping channel QVC. It would prove to be one of the company’s most successful investments.
In 2003, Comcast sold its 57% stake in the home shopping company to Liberty Media for $7.9 billion.
Meanwhile, Brian Roberts was in the trenches learning the business from the ground up. He graduated in 1981 from the Wharton School at the University of Pennsylvania and joined Comcast as a trainee in the Trenton, N.J., system. He transferred to Flint, Mich., a year later, where he was responsible for marketing customer service and apartment building expansion. In 1983, he became the general manager of the Trenton system and in 1984, he moved to Philadelphia to serve as the corporate vice president of cable operations.
The younger Roberts joined the board of directors in 1988.