Ralph Roberts, who died on Thursday at 95, started with a $500,000 Mississippi cable outlet in 1963 that has grown into a $150-billion media giant. Comcast, in fact, is so dominant now that US trustbusters have become worried about it getting bigger, evidenced by their April decision to thwart the company's plans to buy rival Time Warner Cable. Roberts also bequeaths a form of control to his son Brian that must be the envy of even tightly held companies.
Ralph Roberts took a Depression-era riches-to-rags story and reversed it. He built Comcast with a steady collection of acquisitions that eventually led to the $72-billion purchase of AT&T Broadband in 2002, which vaulted Comcast to the country's largest cable provider. On the way, Roberts - along with his son, who succeeded him as chief executive in 2002 and as chairman in 2004 - made investors rich. Since taking the company public in 1972, the company's stock has generated an annualised return that is nearly twice that of the S&P 500 Index, Brian said earlier this year.
The Roberts family also will keep a tight grip on Comcast because of Ralph. Two separate classes of stock put control of one-third of the company in his son's hands, even though his economic interest is far smaller. What's more, the voting power cannot be diluted, an uncommon perk whose value to Brian was evident when Comcast was offering all stock to buy Time Warner Cable.
The medieval governance has not been impervious, however. Aggrieved shareholders persuaded the company in 2008, soon after Comcast's failed attempt to buy Disney, to start paying a dividend and to excise a benefit that would have given Ralph's estate a stipend for five years after he died. As a result, the late Roberts won't be taking anything with him from Comcast, but has left quite a lot behind.
