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Investment company calls Comcast CEO's tenure a Comcastrophe

19 January 2008 16:56 by Rich "vurbal" Fiscus | 3 comments

Chieftan Capital, owner of around 2% of Comcast, this week sent a letter to the cable giant requesting that current CEO Brian Roberts be replaced, and the company's shareholder voting rules be changed to wrest control away from the Roberts family. Despite owning a mere 1% of the company, these voting rules give them nearly complete control over management decisions.

The letter characterized Comcast's management team over the last several years as a complete failure, and laid the blame squarely on the shoulders of the Roberts family, saying "Protected by super-voting stock, management has been free to ignore shareholders entirely"

"Returns on invested capital have been anemic, high-priced acquisitions have proven a waste of capital, capex has ballooned and free cash flow has consistently disappointed. While management has boosted Comcast's operating cash flow by ten-fold in the past decade (mostly through acquisitions), it has created zero return for shareholders," Chieftain wrote in its letter that was signed by managing directors Glenn Greenberg, John Shapiro and Thomas Stern.

When asked to comment on the letter by financial publication Barrons, a senior vice president of Comcast,said the company "continues to perform well, consistently delivering superior revenue and cash flow growth and significant free cash flow, despite a challenging economy and an increasingly competitive environment. Our management team is intensely focused on executing our strategic plan, investing for profitable growth, and creating long-term shareholder value."

However, she also added that the company will "review Chieftain's most recent correspondence and will respond in due course."

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Discuss this article!
ZippyDSM (AfterDawn Addict) 19 January 2008 17:15
mabye we can see some innovation in price schemes that will be in the interest of consumers from this.... [ + quote]
borhan9 (AfterDawn Addict) 16 February 2008 23:35
*Originally posted by ZippyDSM:* mabye we can see some innovation in price schemes that will be in the interest of consumers from this.... I have to agree they have to come up with something new if they want to see themselves still be in the game for the long hall. [ + quote]
ZippyDSM (AfterDawn Addict) 17 February 2008 0:47
*Quote:* *Originally posted by ZippyDSM:* mabye we can see some innovation in price schemes that will be in the interest of consumers from this.... I have to agree they have to come up with something new if they want to see themselves still be in the game for the long hall. Industry wide they are unwilling to set price to speed soemthign as simple as 25/10KBPS=25$/M 250/50KBPS=39$/M 500/200KBPS=59$/M 1000/500KBPS+=90$/M would gain them more than lose them the prices might be ail high but the point is to balance price V cost, what they want to do is say we will give you a 40$ 9Mbit line but you may only see 4Mbit out of it and then they charge you 10cent a MB after the first 20GB. they have it assbackwards most of the companies rule their regions and even if they do not if a company dose not use the above example they will have to throttle,blackout and make the consumers pay more for it. [ + quote]