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TheStreet Open House

Brian Roberts Is Now King of the World

Stocks in this article: CMCSACHTRCBSTWCDTVDISHCVCT

NEW YORK (TheStreet) -- Comcast  (CMCSA) CEO Brian Roberts was in Sochi, Russia this week as his NBC television network was handling broadcasting chores for the Winter Olympics. Yet while many were gleefully celebrating Shaun White's fall from grace, Roberts was managing yet another big deal in an already formidable career. 

The $45.2 billion deal made public Wednesday will make Roberts the dominant player in the pay-TV market. If government regulators approve the transaction, Comcast will merge with Time Warner Cable (TWC) to control over roughly 32% of the country's cable-TV market. More importantly, Comcast will have a firm hold in three more metropolitan areas with National Football League teams: Charlotte, New York and Dallas.

For Roberts, the deal that combines the two largest U.S. cable-TV providers is yet another step toward the unlikely ascendancy of the Philadelphia-based Comcast into one of the country's most influential media and entertainment companies. That Roberts outmaneuvered or simply outmuscled John Malone, the billionaire behind Charter Communications (CHTR) who all but created pay-TV, only adds to the drama.

"Brian Roberts' father should be very proud today," Leo Hindery, a private equity media investor and former CEO of Tele-Communications Inc., which merged with AT&T  (T) in 1999, said in a phone interview. "Roberts has proven once again that his position in the cable industry is one of great integrity and superior management. Not everyone's son turns out to be so good."
Comcast started small as American Cable Systems, which Brian's father Ralph Roberts helped form in 1963 before changing its name six years later to combine the words "communication" and broadcast." While its focus was largely in the mid-Atlantic, the father-son combo audaciously acquired AT&T Broadband in 2001, catapulting Comcast into the lead among cable-TV providers.

Not content as pay-TV operators, the Roberts' made a hostile $66 billion bid in 2004 to acquire Disney (DIS), a shot that ultimately failed but demonstrated Comcast was keen to become not just a provider of media entertainment but a producer as well. In 2009, the Roberts' got their wish, buying 51% of NBC/Universal from General Electric (GE), and then last year, acquiring the remaining stake in the television and film company. 

"They've been opportunistic but they've also been capable of unexpected moves such as this one," said SNL Kagan Senior Analyst Robin Flynn in a New York phone interview. "Comcast hasn't surprised investors in a negative sense -- they've really done what they told investors they would do."

In acquiring AT&T Broadband and Adelphia Communications in 2006, the Roberts' took two under-performing operations and improved their cash flow, Flynn said. If this latest deal is approved. Adelphia's holdings will be reunited after having been split between Comcast and Time Warner Cable when their founder John J. Rigas and his son Timothy, the company's onetime chief financial officer, were found guilty of conspiring to loot the cable television company of millions of dollars.

Roberts has also shown an ability to assuage the concerns of government regulators. The deals with AT&T and General Electric demonstrated the Roberts' gift for timing. The merger with Time Warner is likely to be approved in large part because of the growth of satellite-TV providers DirecTV (DTV) and Dish Network (DISH) which prompted the Federal Communications Commission to eliminate a 30% national cap on cable-TV subscribers.

The Roberts' have conspicuously steered clear of spats with media providers that have led to blackouts. Time Warner Cable chose not to rebroadcast CBS (CBS) in August because of a contract dispute. The two sides secured a new agreement in September.

"Comcast hasn't had those kind of disagreements, which might make it easier for this deal to be approve," Flynn added. "Comcast's history in these mergers is a history that's hard to fault."

--Written by Leon Lazaroff in New York.

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