Family ties help Comcast

The Baltimore Sun

About 47 years ago, Ralph J. Roberts founded Comcast. He was a middle-aged man who had recently abandoned the belt and suspender business, and was looking for something new.

He found it in a tiny company in Tupelo, Miss., which was erecting a giant antenna to provide the local citizenry with signals from the television stations in Memphis, Tenn., 90 miles away.

At that moment, Roberts became a cable pioneer. Along with Ted Turner, John C. Malone, Charles F. Dolan of Cablevision, John J. Rigas of Adelphia and a handful of others, he was one of the men who built the cable industry, pulling off one of the more unheralded achievements in modern business: getting people to pay for something they had always assumed would be free.

Today, most of the cable pioneers have sold out or retired, or, in the sad case of Rigas, gone to jail. But in his understated Philadelphia way, Roberts turned out to have more ambition than the lot of them, and lo these many years later, his company is the biggest cable provider in the country.

It serves about 25 million subscribers, employs 90,000 people and will generate an estimated $31 billion in 2007 revenue.

Except that it isn't his company anymore. Not really. While Roberts, now 87, remains a Comcast director, Comcast is his son's company now.

And therein lies a story that is pretty unusual in corporate America. And pretty instructive, too.

Think for a minute about the generational sagas you usually read about in the business pages. Rupert Murdoch's son, Lachlan, decides he can no longer work for his father, so he quits his job as the publisher of the New York Post.

Charles Dolan and his son, James, who control Cablevision, always seem to be fussing and feuding about something.

Sumner M. Redstone's daughter, Shari, has long been viewed as his heir apparent. But her octogenarian father can't bring himself to let go of his companies, and he has a deep need to show the world who's boss. Just last fall he publicly criticized his daughter - even as he was being sued by his son, Brent.

It's never been like that with Ralph Roberts and his son Brian, who became Comcast's president in 1990 at the age of 31, and has been chairman and chief executive since 2004.

"Theirs is a relationship of love and mutual respect," said David Calhoun, a former Pennsylvania politico who joined the company five years ago as executive vice president. "They are incredibly close."

Brian Roberts knew he wanted to work for his father from an early age, and Ralph Roberts knew pretty quickly thereafter that he wanted his son to finish what he'd started.

As far as anyone can tell, they've never had so much as an open disagreement at Comcast, despite all the obvious stresses that running a business can put on any relationship.

Although Comcast has not been a knockout stock, that's mainly because Wall Street is annoyed that Brian Roberts won't use some of the cash flow Comcast is generating these days to take on more debt and buy back shares.

The reason Comcast wasn't piling on debt, Brian Roberts said, was that the company has always been run conservatively; that was a cultural value his father, a product of the Depression, had instilled from the start.

"My father used to have two years' worth of cash on hand," Roberts said. "Cash! If we owed $5 billion, we might have $500 million in cash, earning just 2 percent. We were super conservative in a business that was wildly leveraged." That the son had adopted the father's fiscal conservatism was something Roberts wasn't about to apologize for.

Indeed, to hear Roberts tell it, his father was the greatest entrepreneur in the history of the cable industry. He kept peppering his answers with references to his dad, and every time he did his eyes would light up.

"My father has a wonderful mentoring style," Roberts said. "He would never say, 'This is a terrible idea.' Instead he says, 'Have you thought about this?' "

When he was as young as 12 and 13, he would ask his father if he could sit in on meetings while his father was negotiating loan agreements with the banks. Afterward, the son would ask questions about why the father had taken this tack or that one. Other fathers and sons went to ballgames, but this is how the Robertses bonded.

When Brian Roberts graduated from Wharton business school, his father resisted bringing him into Comcast immediately; he felt his son would be better served gaining some experience elsewhere. But the younger Roberts didn't want to work anyplace else.

"My father is 40 years older than I am," he said. "His father had died when he was 15. His mother died when he was 19. His brother had passed away in his 50s. How many good years were we going to have together?"

So Ralph Roberts relented, and the son joined the company. It was obvious from Day 1 that he was the heir apparent, but the elder Roberts insisted that he work his way up.

Brian Roberts began his Comcast career as a line installer. Then he put in several years in branch offices before becoming head of operations at age 26. And at 31, his father made him president.

At the time, Comcast didn't use the title chief executive, so Brian Roberts was running the company. Ralph Roberts remained chairman of the board, but stepped aside from the day-to-day operations

Wasn't that an awfully young age? I asked the elder Roberts. "It seemed to me that he was ready to be president of the company," he replied, "and there was no reason not to let him have the job." Besides, he added, "we seemed to think a lot alike."

What happened next is the real key. As often as not, when a son or daughter takes over a parent's company, tension is the inevitable result. The heir wants to upend some of the practices the parent holds dear. He wishes the parent would stop coming to the office or meddling. The parent, meanwhile, finds it hard to let go.

It is not as if Ralph Roberts had set out a grand plan for the transfer of power. But he instinctively knew that it was important to step aside, to not second-guess, to offer advice when it was asked for, and to keep quiet when it wasn't. He also understood that he needed to make it clear to everyone at Comcast that Brian Roberts was the boss now, not him.

"It's not that I have no ego," Ralph Roberts says now. "But I've learned that if you give people confidence and let them take some risks, most of the time they are winners."

"Ralph doesn't support Brian or give him advice because he has to but because he wants to," Calhoun said. "And Brian doesn't have a connecting door between their offices because he feels he owes his father anything. There is simply no one whose judgment he respects more."

Because he is every bit as ambitious as his dad, Brian Roberts probably will spend the next 20 years or so trying to make Comcast bigger still. He believes the same thing his father does: People love television. And Comcast can make a lot of money servicing that desire.

"Here are two great facts," Brian Roberts told me as we moved the conversation back to the business. "Last year, more people bought more TV sets per household than any year in history. And half of those sets were 50 inches or bigger."

Ralph Roberts, meanwhile, doesn't have a title at the company anymore, but he does still have an important role as the keeper of the Comcast flame.

After Hurricane Katrina, it was Ralph Roberts who went to Mississippi to visit Comcast employees working to get television service restored, even though their own lives had been disrupted.

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