Comcast: ‘Fox price too high’
July 26, 2018
By Colin Mann
Comcast Chairman and Chief Executive Officer Brian Roberts has admitted that the communications giant dropped out of the battle to acquire a range of 21st Century Fox assets in competition with Disney because the price was becoming too high to build shareholder value.
Speaking on Comcast’s Q2 2018 Earnings Conference Call, Roberts admitted to analysts that the Fox bid was “mostly about international expansion” and accordingly, having ceded to Disney as far as the Fox bid was concerned, the company was now focused on its bid for Sky, where Fox is seeking to acquire the 61 per cent of the broadcaster it does not already own.
Describing the chance of acquiring the Fox assets as “a unique opportunity”, Roberts said that Comcast was “very disciplined” in its approach to the bid, but thought the deal was mostly about international expansion opportunity. “We had regulatory belief that it was approvable in the United States. Ultimately we pulled back because we thought we couldn’t build enough shareholder value by making the price that it seemed in our judgement to be able to buy it at, which was increasing.”
Roberts’ comments came as Comcast reported Q2 consolidated revenue up by 2.1 per cent, with net income attributable to Comcast up 27.6 per cent.
The Q2 net income attributable to Comcast figure includes $20 million of operating costs and expenses and $11 million of interest expense ($31 million in total, $23 million net of tax) related to the Sky and 21st Century Fox offers.
“We delivered fantastic results in the second quarter, including robust free cash flow of $4.3 billion,” advised Roberts. “At Cable Communications, we added 182,000 customer relationships, largely driven by our addition of 260,000 broadband customers, which was the highest second quarter result in 10 years. These strong customer metrics were balanced with robust EBITDA growth, fuelled by high-speed Internet and business services. NBCUniversal’s performance was highlighted by continued momentum in affiliate revenue at our cable networks business, and Telemundo presented its first ever FIFA World Cup which set multiple records for the network. Additionally, we are excited about the new attractions that we opened at each of our theme parks during the quarter, and pleased with the theatrical performance of Jurassic World: Fallen Kingdom. Overall, our successful results in the first half of 2018 underscore the strength we see across Comcast NBCUniversal.”