Wednesday, January 30, 2008

Comcast CEO is under fire

--On the subjects that matter most to investors -- financial performance, strategy and corporate governance -- Comcast's scores are decidedly lackluster. --The stock has fallen 39% in the past year. While it has held its own over the past couple of years relative to competitors such as Time Warner Cable Inc., the future doesn't look especially bright. Revenue is expected to rise at an annual rate of 6.6% for the next five years, compared with 8.3% growth at Time Warner Cable --Comcast also has proved itself to be a poor acquirer. Since 1999, it has spent about $80 billion on acquisitions, including the $58 billion purchase of AT&T Broadband in 2001. Return only 5$ tis past year. That is less than the company's weighted-average cost of capital of 8%. It tried to buy Walt Disney Co. for $66 billion in 2004 in a deal that looked dilutive for Comcast's shareholders at the time. --Comcast's governance may leave the bitterest aftertaste. Comcast has a dual-class share system that gives Mr. Roberts a third of the voting power despite owning less than 1% of the total stock. While this is typical of many U.S. media concerns, Mr. Roberts' stake comes with an added provision that allows him to keep his voting power even if Comcast issues new stock.

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