Comcast's 'Peter K' buys more than $15B as procurement czar

Comcast's Peter Kiriacoulacos and some of the purchases he has made for Comcast, such as the Xi5 set top box, the XB6 router, and the XR15 remote.

Stock prices jump and factories hum on news of his decisions.

Executives hop in planes to see him. 

Comcast Corp.'s Peter Kiriacoulacos, or simply "Peter K,"  is one of the most-sought-after execs in Philadelphia, presiding on the 53rd floor of the Comcast Center over an 80-employee team that purchases more than $15 billion a year in advertising, set-top boxes, TV remotes, office furniture, software and vans.

"You would be shocked by the third-party vendors that surround this place. And I love that," the sharply dressed Aussie said over lunch one day in the Chops restaurant in the Comcast Center, talking about suppliers who have opened offices to be near his procurement team.

"Because without those guys we would have nothing to deploy" in subscriber homes, he said. "We want them to treat us as the No. 1 customer, as we should be. We want to be front of the queue."

As Comcast has grown, gobbling cable companies and acquiring NBCUniversal, corporate functions such as purchasing have concentrated at the Comcast Center, leading to a steady traffic of executives into Center City. They lodge at hotels. They dine in restaurants. They stoke the city's business-travel economy.

Every quarter, Wall Street analysts focus on Comcast's expenses for TV and movie content. These amounted to $10.5 billion in 2015, much of it flowing to entertainment and TV companies in New York or Hollywood. Kiriacoulacos has no responsibility over those TV contents rights contracts but, in fact, spends even more: at least $15 billion, on just about everything else. A handshake with the 46-year-old Peter K is a big deal.

Arris Group Inc., the big telecom equipment manufacturer and developer with hundreds of employees in Horsham, Montgomery County, decided that the suburban Philadelphia location may be too distant from Comcast's downtown headquarters.

So five years ago, Arris opened a 10-employee office on the 18th floor of Two Logan Square, blocks away from the  Comcast Center. Now Arris engineers or managers don't have to hang around the Comcast lobby or in the Comcast cafeteria waiting for appointments,  Arris CEO Bruce McClelland said of the Center City office. They walk over.

"It's fabulous. They are our largest customer and for that to happen we had to develop the relationship," McClelland said in a phone interview. Comcast accounted for 21 percent of Arris' revenues in 2015, according to its corporate regulatory filing. Around the holidays, Arris even holds a Christmas party at Davio's in Center City, on the 100 block of South 17th Street, for Arris and Comcast staffers.

Imran Shah, managing partner of IBB Consulting, which has offices across from the Comcast Center and does consulting work for the cable giant, said that Kiriacoulacos has helped Comcast with its "transition to a technology company, orchestrating the right relationships and partnerships that continue to push the company forward. His savvy and polish in interactions with vendors and partners is a considerable asset for Comcast, and of course, his GQ dress and Australian accent don’t hurt, either."

Kiriacoulacos, whose parents were born in Greece and whose last name is pronounced "kee-ree-ah-koo-LAH'-kohs," came to Philadelphia in 2007 from Amsterdam. He worked in Europe for Liberty Global, where he knew Tony G. Werner. Werner is now president of technology and product at the Comcast cable division, heading its development of new technology products.

Kiriacoulacos streamlined Comcast's supplier network to gain control over costs while at the same time sustaining the health of critical suppliers who remained under contract. Kiriacoulacos then added  NBCUniversal to his procurement portfolio after Comcast bought the entertainment conglomerate in 2011. His team now has responsibility for most purchasing at Comcast/NBCUniversal, outside of TV content rights. Kiriacoulacos holds the title of chief procurement officer and executive vice president at Comcast and NBCUniversal.

Garry Maddox, the former Phillies centerfield standout and president and chief executive officer of the Philadelphia-based A. Pomerantz & Co., a business furniture distributor, said the "rumor mill" swirled when Kiriacoulacos came to Philadelphia.

"The first thing that Peter did when he came here was to get rid of the sole source supplier" agreement that Comcast had with A. Pomerantz for furniture, Maddox said. The single-source agreement had been good for Maddox and stripping it away seemed like a blow. But Maddox said that the change made him more competitive with other furniture distributors and that, over time, A. Pomerantz benefited when it could bid on NBCUniversal furniture contracts.

Kiriacoulacos also helped save Maddox from a near-disaster. A national furniture distributor wanted to drop A. Pomerantz. Kiriacoulacos called the furniture company and told  them that Maddox was “our guy," Kiriacoulacos recalled. If the furniture company wanted to do business nationally with Comcast and NBCUniversal, it would have to retain A. Pomerantz as a distributor. The furniture company did. Maddox confirmed the story.

Pomerantz supplied furniture to the Comcast Center headquarters and now it has a $12 million contract to provide furniture to Comcast 2.0, the company's second skyscraper that will open in 2018. Last year, a corporate advocacy group, the Billion Dollar Roundtable Inc., recognized Comcast for achieving $1 billion in spending with women- and minority-owned suppliers.

Maddox, the Phillies' former “Secretary of Defense” and multiyear Gold Glove, said that he got Kiriacoulacos out to a Phillies game when he first came to Philadelphia. But he doesn't think the Aussie found  America's game particularly thrilling. "I haven't got him to a second one," Maddox said.

Though ambivalent about the Phillies, Kiriacoulacos says he's a huge fan of Philadelphia, particularly its architecture. He also likes the regional diversity of the United States, noting the differences between Philadelphia, the Deep South and Hollywood. His wife, Molly, hails from Louisiana. They live in Center City.

Hard bargaining with suppliers over terms comes with the territory as procurement chief. But Kiriacoulacos also encourages big Comcast cable suppliers to hold corporate events at the Universal theme park in Florida, which leads to cross-pollination between the two Comcast units, Comcast cable and NBCUniversal.

Sustaining a healthy supplier base in the consolidating telecom-equipment industry keeps him up at night, Kiriacoulacos said. Comcast maintains relationships by signing warrant deals with some suppliers. If Comcast purchases a certain amount of services or products from a supplier, the Philadelphia company obtains warrants, or rights, to purchase stock in the supplier company. Both companies benefit because the supplier knows that Comcast could make big purchases of its equipment or services, Kiriacoulacos said.

Earlier this year, the stock in a Santa Ana, Calif., consumer electronics company soared about 14 percent on news that Comcast could purchase $1 billion in TV remotes and other equipment from it over six years. As part of the deal, Comcast acquired the rights to purchase 725,000 shares in Universal Electronics Inc. at an exercise price of $54.55 over the duration of the agreement. Said Kiriacoulacos of deals like it: "We are somewhat joined at the hip." 

 

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