CEO offers first public discourse on hostile bid

This article was updated at 7:04 p.m.

NEW YORK — Brian Roberts delivered a subtle message to Disney shareholders Monday: Technology is going to transform your business. Join us now or the revolution may overwhelm you, even if our financial proposal hasn’t.

Speaking to investors at the 17th annual Bear Stearns media conference in Palm Beach, Fla., the Comcast CEO reiterated his Disney campaign speech — despite having been twice rebuffed by Disney’s board for a lowball bid — while simultaneously trying to reassure Comcast investors that he has no intention of recklessly mortgaging his company in a do-or-die Mouse raid.

In his first public discourse on the hostile takeover bid since the deal was first proffered last month, Roberts stressed that by wedding Comcast’s distribution technology and “theater” of 22 million homes with Disney content, the company could “accelerate the change that we fundamentally believe is happening to TV in this country.”

“You don’t get to pick the time of your opportunities … they pick you,” Roberts said in defense of the timing of Comcast’s bid. “Right or wrong, we anticipated that this was a company in a position to consider its strategic future and strategic alternatives. I believed then and believe now that if you put it together in a rational way, fair to both sets of shareholders, the resulting company will be better for both sets of shareholders,” Roberts told the lunchtime gathering of large institutional investors and fund managers.

“If it happens, great. If it doesn’t, life goes on,” Roberts said of the Disney plan, adding that Comcast will continue to stay focused on its core cable business and its access to cutting-edge broadband technology.

But actions speak louder than words. Despite the fact that Comcast has lost some $8 billion in equity value since making its bid (while Disney gained $5 billion), Roberts has not taken his initial offer off the table. ‘We’re not asking (shareholders) to sell out the Disney company … we’re offering them 42% of a combined entity. But we have to look at it in a way that’s fair to both (companies),” Roberts said.

Speaking to both his constituencies, Roberts insisted content and distribution can work together but don’t have to work together.

“We’re disciplined in saying that you can’t pay for that opportunity at the expense of your own company,” he said. Unlike Comcast’s acquisition of AT&T Broadband’s 12.5 million cable subs, Disney is not a “must-have,” said Roberts.

The campaign went deeper than financials, however.

Noting that the broadcast networks failed to exploit the most recent cable revolution, which saw the creation of new brands such as CNN, Discovery, ESPN and HBO, Roberts warned that Disney would not be at the forefront of wealth creation without Comcast at its side. “We can take content and libraries and portfolio of Disney and help accelerate its growth rate,” said Roberts.

Roberts said he was “blown away” by consumers’ rapid adoption of video-on-demand in early rollouts. In the Philadelphia market with just under 1 million subs, the company said 60% of customers use the service, with the average household now downloading at least 20 shows per month from its current cache of some 2,000 hours of content. Very soon, he predicted, the company would be able to double that server capacity for half the price, to the point where subscribers will able to access 10,000 hours or more for only “incremental” capital costs to the company.

Alongside new broadband wonders like videophone, video email and chat, Roberts said Comcast could, within the next five years, offer content downloads at a blistering 100 megabits per second, compared with the 3-megabit download speed it offers today. He also predicted features like voice-activated remote control.

With or without Disney, Comcast is proving just how much clout it already has in the media and technology space. Last week’s three-day management powwow in Phoenix featured presentations from big guns Bill Gates, Barry Diller, Mel Karmazin, John Malone and Carly Fiorina. Not just any cabler can woo talent of that caliber.

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