Under Brian Roberts, Comcast has grown more than 100 fold

One Friday in June, Comcast Corp. CEO Brian L. Roberts made the short trip from the Comcast Center to the Barnes Foundation to make peace with a man many consider to be one of Comcast's most dangerous foes.

Roberts' fellow art gazer, Netflix Inc. CEO Reed Hastings, was the California businessman who helped sour the federal government on Comcast's proposed $45 billion deal for Time Warner Cable.

"We got off the rails in the Time Warner deal," Roberts said ruefully, speaking of Netflix. "I wanted him to know that we believed Netflix was important to the ecosystem. I asked him what it would take to hit the reset button."

On Nov. 4, the two companies publicly reset the relationship with the launch of Netflix on Comcast's X1 cable set-top box. The new service broadens consumer appeal for their respective services and helps Comcast with federal regulators who say that pay-TV companies should integrate traditional TV and streaming services on set-top boxes.

And it was consummate Roberts: strategic, persistent, and unflappable. Today's competitor such as Hastings could be tomorrow's ally or acquisition target.

Consider this: In 1990, the founding Comcast executive team led by Brian's father, Ralph Roberts, cleared the way for the younger man's ascendancy. Then based in Bala Cynwyd, Comcast boasted a market-capitalization of $1.5 billion and annual sales of $670 million.

Today, Comcast is more than 100 times larger. It's running at a rate of about $80 billion in sales and trades on Wall Street with a market cap of $150 billion.

Said longtime media executive and Brian Roberts friend Barry Diller: "He's probably a little more paranoid [than his father Ralph] and that may be one of the reasons why he will get through this period of creative destruction better than most."

How growth happened

So how did Roberts take a regional cable operator and transform it into No. 37 on the Fortune 500 list?

He bought tens of billions of dollars' worth of cable companies, expanded into the internet and telecom services, and took a contrarian view of where the industry was heading by vertically integrating Comcast with NBCUniversal. At that time, Time Warner Inc., the owner of HBO, TNT, CNN, and other channels, was dismantling its cable-TV distribution arm through the spin-off of Time Warner Cable.

The sailing hasn't always been smooth. Comcast is too politically and economically powerful, critics believe. Its proposed deal for Time Warner Cable in 2014 and 2015 exposed how deeply unsatisfied consumers were with Comcast's customer service, which the company has promised to spend hundreds of millions of dollars and hire thousands of new employees to fix.

"Do you have to be this way to be successful?" asked Consumer Federation of America chief economist Mark Cooper. "Clearly, he has been successful at building a huge conglomerate with immense market power," he said, adding that one outcome of Comcast's power has been the higher rates it charges consumers.

Another variation on the theme of market power is what Comcast calls "scale" - or bigness so that it can spread costs over millions of subscribers and gain leverage in negotiations with entertainment companies.

Roberts has pursued scale like no other cable operator.

"Comcast just seems to get it earlier than others," said Mary Kelly, an assistant professor of economics at the University of Villanova business school who began her career as a management trainee at AT&T Inc.

"They get it quicker and take bigger risks. As a competitor of Comcast, I always want to be thinking what they're doing next."

Lou Shipley, a lecturer on entrepreneurship at the Massachusetts Institute of Technology, said that when it comes to cable companies, "you don't hear the words innovation and vision." But he said Roberts "has a lot of vision."

"It's often easy to talk about CEOs and how much they make," Shipley said. "But we don't always talk about how much value they create."

The recent flurry of proposed mergers involving content companies and technology or telecom giants - such as Microsoft's deal for LinkedIn, Verizon's for Yahoo, and AT&T Inc.'s for Time Warner Inc. - seems to confirm the wisdom of Roberts' strategy to combine Comcast's cable business with the entertainment and news giant NBCUniversal in 2011.

Comcast bought NBCUniversal for a discount as its parent company, General Electric, unloaded assets after the 2008 financial crisis. Comcast had the cash and borrowing capacity for a megadeal when others didn't.

John C. Malone, a cable pioneer and friend to Brian Roberts and his father, Ralph, said that "it's strategic to have money when no else does." With NBCUniversal, Comcast and Roberts were able to "take the pants off GE. He was able to do it in a way that was very beneficial to Comcast with very little risk."

'Listen, learn, and adjust'

Roberts is tall and lean. He golfs. He runs. He hikes - as he did with Hastings in Silicon Valley after their Barnes meeting in Philadelphia in June. He can be friendly but also stand-offish.

He doesn't like media interviews but can be chatty in small gatherings. He doesn't relish conflict like other media moguls - say, Rupert Murdoch.

His humor? Dry.

"My dad never spoke," said Roberts, who was an all-American squash player at the University of Pennsylvania. "My squash coach was a Marine. One always liked to listen and one always liked to bark orders. But they both worked. The secret is to listen, learn, and adjust."

At a recent Greater Philadelphia Chamber of Commerce breakfast, Roberts told the story of when Comcast technicians cut the long-distance phone line to the Trenton mayor's home.

Fearful that the mayor would be upset, a young Roberts - who was working in Comcast's Trenton division at the time - knocked on the mayor's door to tell him.

Surprisingly, the mayor was grateful for a night without the phone ringing. The takeaway lesson for Roberts: Things aren't always as bad as they seem. Don't panic.

On Roberts' wall in the Comcast Center hangs a Feb. 6, 1990, personal letter to Daniel Aaron, one of the triumvirate who launched Comcast along with his father, Ralph, and Julian Brodsky.

In the letter, Roberts thanked Aaron for his "heart," and Brodsky for his financial "savvy," and Ralph Roberts for his "stock."

He meant the super-voting Comcast shares that have allowed the Roberts family to retain control of the nation's biggest cable company and one of its largest entertainment providers.

With those "B shares," Comcast control passed from father to son. Brian Roberts' class B shares control one-third of the Comcast shareholder votes - de facto control of the corporation, experts say.

Roberts now finds himself heading a company with more than 130,000 employees.

"I believe I have one job and that is to keep the company feeling small," Roberts said. To do so, he participates in unscripted talks with new employees at the Comcast Center and regularly touches base with different parts of the empire.

He recently quizzed the head of NBC News about a big, multimillion-dollar project that he didn't want to disclose. He phoned NBCUniversal's Jeff Shell in China about the consumer products business there, and spoke to 1,400 to 1,500 Comcast engineers and software developers at the Pennsylvania Convention Center on the company's innovation goals.

Among other products, those engineers are developing a Comcast wireless service expected to launch next year.

"The businesses that we happen to be in are so dynamic and the nature of the company has changed so much. Just when we'd been doing it for so long and just when we found that there might not be more cable to buy, along came NBCUniversal," Roberts said.

At 57, he's still a young man for a top executive. None of his three children works in the company.

"It's hard to imagine it getting stale. And for some, you follow the lead of your parents. And my father and mother, they are the types that never retire," Roberts said. "My mother [Suzanne Roberts] is still doing her TV show and my father came to the office until the day he died." Ralph Roberts died in June 2015 at 95.

Tony Werner, a longtime cable industry executive who has worked for Malone and is president of technology and product at Comcast, said: "I think he wants to pass along something [when he retires] that has 40 or 50 years of life in it and not something that has peaked."

bfernandez@phillynews.com

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