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Page 3 of 3. Go to Page 1 or 2 Continued Excerpt from Given Comcast’s size and its founder’s stature, no one who could get an eye open in the 1990s was surprised to see Comcast at the center of many of the decade’s headline-stealing deals. From the showdown with Barry Diller over the fate of the QVC network in 1994, to the 1999 battle between Comcast and AT&T over MediaOne, the quiet, bow-tied Roberts was clearly one of the titans of the cable industry. Even the MediaOne deal—which Comcast “lost”—demonstrated the company’s mastery of the art of the deal. As the price of walking away, Comcast extracted a $1.5 billion “break-up fee” from AT&T and the opportunity to buy prized systems serving two million subscribers. “Ralph just has the instinct for the right terms of a deal,” says Decker Anstrom, former head of NCTA. “The right time to make a deal, the right time to make a decision . . . or not make a decision. He’s just a wonderful, instinctive businessman.” Alan Gerry, founder of Cablevision Industries, agrees: “Ralph is one of the smartest guys in the business by far. He will go down in history as the guy who won all the marbles.” Roberts would be the first to say that one of the sweetest aspects of Comcast’s success in the past ten years is having his son Brian at the company’s helm. Of the Roberts’s five children, Brian was the only one who wanted to go into the business. (Each of Roberts’s other children is “doing his or her own thing with great success,” says their father. His eldest daughter, Catherine, has been on the faculty of a medical school and is currently serving on the board of the Philadelphia Orchestra and the Kimmel Performing Arts Center. His second daughter, Lisa, is an architect and designer associated with the Philadelphia Museum of Art, of which she is a board member. The eldest son, Rob, is the chairman of an academic department at a university. The youngest son, Douglas, is an assistant district attorney. Their actress mother, Suzanne, who is noted for her multitude of public service activities and television programming, hosts her own Emmy Award winning show, “Seeking Solutions with Suzanne,” seen daily on CNN Headline News on Comcast systems.) “Ralph didn’t just hand the company to Brian,” says Frank Drendel, chairman of CommScope, Inc. “Brian went out and earned it—climbed poles, did sales, knocked on doors, worked his way up to understand the business from the grassroots.” Brian Roberts’s first job for Comcast came when he was in junior high in the 1970s. “On weekends,” says his father, “he would come to our office and punch holes in the payment coupon books we sent to our subscribers. We paid him 25 cents an hour. If he did an especially good job, I think we paid him a modest bonus. When he got to high school, I used to take him with me when we negotiated loans with the lawyers, bankers and insurance companies. He would sit in a corner and take it all in, following strict instructions not to open his mouth.” In spite of his father’s gentle discouragement, the Wharton graduate stuck to his determination to join the company full-time. “I explained it would be better if he worked for someone else for two or three years,” says Ralph Roberts, “and then brought back some fresh thinking to the company.” But his son was “persistent, day after day, until finally, he looked me in the eye and said: ‘Why are you rejecting me? You’re not getting any younger. I would like to work for you for a few years, before you’re gone.’” Roberts relented and told his son to start work the next week. Brian’s first serious job was at the company’s Trenton, New Jersey system, followed by a stint as assistant manager of Comcast’s system in Flint, Michigan. Over the years he proved himself and in 1990 was named president of the company, a signal that the process of passing the torch had begun in earnest. “Ralph Roberts has done by far the best in thinking far into the future in terms of the business pieces and in terms of succession,” says David Van Valkenberg. “He’s done a very, very good job with getting Brian prepared to take over and appears to have done a very good job of stepping away, giving Brian the limelight.” “Ralph and Brian have the most remarkable father-son relationship I’ve seen in any context,” Leo J. Hindery, Jr. told Fortune magazine in 2001. “Rather than battling each other, as fathers and sons often do in a family business, they have this supportive, loving relationship.” At the same time, Roberts has said that if his son had not shown sufficient talent, he probably would have sold Comcast. “You can’t sacrifice all the people in the place for a poor manager,” Roberts told The New York Times in 1997. “The most dangerous thing is a son or daughter coming into a business where they think they get special treatment. They drag the business down because it kills the morale of everybody in the company.” In 2000, Ralph Roberts gave his son Brian the biggest vote of confidence to date by transferring his voting stock to him. Ralph Roberts is clearly tickled by his heir’s knack for bold decisions. In 1997, Brian Roberts helped raise cable’s fortunes during a now-legendary encounter with Microsoft’s Bill Gates at a cable industry gathering. “Bill Gates was demonstrating for the CEOs of some of the major cable MSOs some of the wonders that he was going to produce,” says Ralph Roberts. “Gates was criticizing the cable operators for not rebuilding their systems fast enough.” Roberts continues: “So Brian spoke up: ‘If you really want to help, why don’t you buy ten percent of every cable company? Then we can rebuild faster.’ A couple of days later, Brian got a call from the chief financial officer of Microsoft who said, ‘We want to follow up your conversation with Bill about our buying ten percent of your company.’ So Brian said, ‘Sure, but let me talk to my father.’” Within days, Gates had bought one-tenth of Comcast for $1 billion. “I’ll tell you, I expect anything from Bill Gates and I expect anything from Brian,” Ralph Roberts chuckles. Roberts also wasn’t the least bit surprised when, four years later, his son proposed the biggest deal in Comcast’s history: a $52 billion play for AT&T Broadband. It took the better part of a year, and a very public back-and-forth between Comcast and AT&T, to close the deal. Ralph Roberts backed his son all the way. As satisfying as it was to win, the sweetest moment for Brian Roberts came after the victory. “In some ways, AT&T had been a maniacal focus for me for several years,” says Brian. “The day AT&T agreed to the deal, my father and I both happened to be staying at the St. Regis in New York. A group of us were waiting in my room for the call to come in. It came late in the day. We went to meet with AT&T and signed the papers cementing the deal. Then everyone had champagne at the lawyers’ offices. I went to talk with a few reporters and got separated from my dad. Eventually, a small group of us, including Ralph, collected at the St. Regis for a drink. We were all exhausted and we were facing an investors’ conference the next day, so everyone wanted to go to bed. My father and I ended up being the only two people in this group staying on the same floor—by sheer coincidence. We got off the elevator together, just the two of us. We wandered down the hall and stopped at my door. He put his arms around me and said, ‘This is a miracle. I’m so proud of you.’ And, of course, we were both crying. We had worked so hard, plotted it out, thought it through. We’d gone around and gotten people to support us. It was a come-from-behind victory. There have been so many moments like that, when Ralph says just the right thing at just the right time.” For Ralph Roberts, watching his son grow into the role of an industry leader has been gratifying. “He has always said that you can’t always build a great company in one generation,” says Brian Roberts. “He doesn’t have a big desire to have his name on buildings or on the company. But being able to work with his kid . . . I think that has made it special for him.” Ralph Roberts agrees that building the largest cable company in the United States—one which serves 21 million subscribers—was extremely satisfying, but more significant was doing so “while still holding on to a small family-business culture.” “It’s easy to establish a fine culture when you’re small,” observes Roberts, “because the company is really an extension of yourself. However, as you get bigger and you involve more and more people, it’s much more difficult. We stress to every employee that you should be your own person, that you should feel that this place has a responsibility to you, that it is still a family. If you don’t like what’s going on, stand up and tell people you don’t like it. I’ve always encouraged folks to feel that the company belongs to them. We gave away stock options at the very beginning. Whenever I see a great big boat sitting on the front lawn of some manager’s house, I ask, ‘Where did that come from?’ ‘Oh, that came from my stock options.’ That feeling of ownership is something you have to hang on to no matter how big you get.” Roberts advises young entrepreneurs to have “an idea of something you think would be a successful business . . . something to hang your hat on. Then you have to have determination, because you’re going to have ups and downs, and you have to be able to live through the down cycle in order to get to the up cycle. “You should also have some imagination so that you can see something perhaps where no one else does,” counsels Roberts. “Plus a willingness to take a risk—and to move on to something else if the idea turns out not to be a good one. Remember, too, that the more benefit the buyers get out of whatever you’ve got, the more successful you’ll be, so your idea should be one that does something good for lots of people.” “Be comfortable with yourself” might be another tenet of Ralph Roberts’s philosophy and style. “My father welcomes differing points of view,” says Brian Roberts. “He doesn’t surround himself with yes-men and -women or shrinking violets. Some entrepreneurial companies may fall into that trap, where, sadly, nobody is willing to say, ‘I don’t think you should do that.’ To my father’s credit, he’s always had strong-minded, individualistic, smart people in his partnership inner circle, and even if they don’t always agree all the time, that’s okay. “What has taken Comcast a little further,” Brian Roberts continues, “is my father’s desire to hand over something lasting to others. He wanted to be an entrepreneur, but one who created a company that is professionally managed, rather than being an entrepreneur who says, ‘I want to make every decision myself.’” “Ralph is the ultimate entrepreneur,” wrote Dan Aaron in his memoir. “His sense of timing is precocious. He mulls over his strategy endlessly, but once he goes into action, sparks fly. When he attains his goal he modestly withdraws and lets others take the credit. He has participated in every major decision of the company. That the company mirrors Ralph’s personality is undoubtedly the greatest tribute we can pay him.” Says Ralph Roberts: “There’s a great deal of pleasure to be had in helping to create something meaningful. I mean, if I had been an instrumentalist and could play the cello like Yo-Yo Ma, that would have been my joy. Instead, I happen to enjoy the intrigue of business generally, and all its ramifications. Through pure good luck, I fell into a business that I really believed would be a winner. It provides a service most people want: a bigger variety of television programming. Cable was a way to give viewers more sports, movies, and special programming than they could ever get over the air. We brought them choice. We‘ve gone from three channels back in Tupelo to over 200. And by delivering the power of choice, and focusing on internal growth and an aggressive acquisition strategy, Comcast has grown from 1,200 subscribers to 21 million. I think back to sitting in Mr. Snow‘s office in Meridian, trying to save my business. Never in my wildest dreams did I think I‘d be sitting where I am today. “If I had a choice between having a large pot of money and no business, or having a business and less money, I’d rather have the business,” concludes Roberts. “It’s more intellectually stimulating. And you’re building something. There was never any intention on my part to sell out. “Then, along came Brian,” he says, smiling. “And it was perfect.” [end] Return to the Gallery of Clients. |
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