CEOs from the top seven cable operators lamented the declines in their stock prices and the specter of further government regulation, but remained optimistic that their platform is the best for future growth.
At the May 5 closing general session of the National Show here, Comcast Corp. cable division president Steven Burke seemed to shoulder at least some of the blame for the decline — cable stock multiples are at a six-year low, while growth in the industry has never been better.
Burke said investors and Wall Street perceived Comcast’s bid for The Walt Disney Co. (withdrawn last month) as a signal that Comcast was less confident about the cable business. That, he said, couldn’t be further from the truth.
“I don’t think there is any question that our bid for Disney at least distracted us,” Burke said.
“But if you look forward and concentrate on operating the business, we see tremendous opportunity.”
Cox Communications Inc CEO Jim Robbins ribbed Burke for starting the decline in cable stocks with the Disney bid.
“There is no question that going after Disney hurt all of us,” Robbins said.
Robbins added that there is a perception that because of the cable ownership cap, Comcast can’t buy any more cable operations.
“At some point along the way, as a result of the [ownership] cap, there is this feeling that Comcast is not going to be able to go beyond,” Robbins said. “If that’s the reason they have gone to programming, because that’s where they really think they have growth going forward because they can’t do any more in the horizontal distribution business, then state that and go forward.”
All seven MSOs tried to avoid questions about the possible sale of Adelphia Communications Corp., which last month said it would consider a sale of the company in conjunction with its plan to emerge from bankruptcy.
Time Warner Cable chairman Glenn Britt reiterated the company’s past statements that it is interested in growing its cable footprint, but it would not pay high prices to do so.
“There will be a process and we’ll see how it works out,” Britt said.
All seven cable executives — who also included Insight Communications Co. CEO Michael Willner, Mediacom Communications Corp. chairman and CEO Rocco Commisso, Cablevision Systems Corp. chief operating officer Tom Rutledge and Charter Communications Inc. CEO Carl Vogel — said that the greatest challenge on the regulatory front is the threat of forced a la carte programming.
Willner said the industry needs to keep hammering home to Washington legislators that a la carte will not work.
“Consumers will have [fewer choices] and they’re going to pay more for it,” Willner said. “Keep saying it, go to Washington and tell the story.”
