tv The David Rubenstein Show Peer to Peer Conversations Bloomberg June 17, 2017 1:00pm-1:31pm EDT
♪ david: what propelled you to want to join this company? brian: i always wanted to work for my dad. david: did he say you could start at the bottom and work your way up, or could you start at number two? brian: that is what i wanted to happen. david: have you ever had problems with your cable? brian: sure. david: is it intimidating for the cable repairman to come to your house? >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪ david: i don't consider myself a journalist. and nobody else would consider myself a journalist.
i began to take on the life of being an interviewer even though i have a day job running a private equity firm. how do you define leadership? what is it that makes somebody tick? ♪ david: when you graduated from college in 1981, you went to the university of pennsylvania, then joined the company your father had started, comcast. at that time, it was a relatively small company. did you think you would become the leading company in the telecommunications area? brian: we had about $20 million in revenue that year, and my father when asked that question many years later would say, of course. the reality is neither of us dreamed we would be lucky to be comcast-nbc universal with the wonderful products and company we have. i pinch myself every day. david: did you say to your father, i don't want to join the
company and might do something else? what propelled you to want to join this company? brian: i thought about that. i just always wanted to work for my dad. he used to be in the men's belt and suspender business before comcast, men's cologne. we would play with the cologne growing up as kids, and he had a passion about it. he just it seem fun for me. he never pushed to me, even a little bit, to want to work for the company. david: what was your father's background? brian: he got out of the navy, he was living in philadelphia, met my mom, and got married. they were married 72 years till he passed away a few years ago. he was very interested in business and went to wharton school. he was an entrepreneur. rs,made golf club putte benc, he worked for senator in advertising, so he liked the marketing, advertising, and products side. one day, he got into men's cologne and he just loved the
smell and the marketing aspect. the same with products like a belt or suspender. technology came along and he got himself convinced that polyester pants without belts would be the technology that could put him out of business, so he sold his business. he was walking around philadelphia apparently in 1963, and a guy said to him, ralph, i have a new venture for you. you ought to buy a community television system in tupelo, mississippi. has he told the story, he said is tupelo, and what is antenna television? in tupelo, mississippi, they cannot get cbs from memphis, a valley town, so they put up a big antenna on the top of the mountain and ran a community antenna, catv, and those were the early routes of cable television. david: television was for free
in those days and now you have to pay for it in tupelo, mississippi. was that hard to convince people to pay for television? brian: he liked the subscription nature. so in belts, cologne, any other businesses, you have a product, you sell it. if you get sick next month, you're out of business. in our business you have to go borrow a lot of money and hope they will come. then you have a recurring business that you have a face to work with. david: where did the name comcast come from? brian: great question, it did not get asked very often. in 1963, being the community company, heantenna dreamed up the name comcast. com was communications, cast was broadcasting, and we were going to merge. we would be in the future of communications and broadcasting, so he was very visionary in that respect.
david: he bought the franchise in tupelo, mississippi. how much did he pay for that? brian: a few hundred thousand dollars. david: and what did he do after that? did he start buying other franchises like that? brian: the next-door town was meridian. he would go down to tupelo, he never moved there, he had a philosophy of decentralized management. in that you would have a local manager who should feel like they own the business. the general manager in tupelo. they went and bought meridian, then he got into michigan, new jersey, pennsylvania. we started buying other operators. and as the business evolved to the 1980's, one day it was not just a valley town business, a rural business. espn, hbo, and cnn came along, and it was suburban and urban, so there were 30,000 cable franchises awarded, and eventually they needed to consolidate to be more like a tv business or phone business where you had larger service areas, and that is when comcast stepped on the pedal. david: in 1972, if i had bought your stock --
brian: if you had bought 1000 shares, it came public at $7, $.25 the all-time low, you would have over $11 million today, an 18% plus compounded return for 45 years. if you put the same $7,000 in the s&p 500, just over $500,000 with a 10% return. david: not bad. brian: not bad. david: when you joined the company, did he say start at the bottom and work your way up, or did he say you could start at number two? david: that is -- brian: that is what i wanted to happen, but he put me through a wonderful kind of de facto training without either of us talking about it that way. so one summer i climb poles and learn to be an installer, had real trouble holding a ladder. i was weak and 15 years old. one summer i sold door-to-door hbo subscriptions and cable subscriptions in some neighborhoods, and then another
summer i went and sold muzak, a business comcast was in at the time installing and selling. when i got out of wharton school undergrad, i was a finance major and it was like let's go do deals. he said, no, move to trenton, new jersey. i never worked in cable. that was one of my later businesses in life. my dad was in his 40's when he started comcast. which is a great lesson for people. if you have not found your thing yet and you are 40 years old, it is not too late. many people think it is way too late, but he said i will never know this business. why don't you learn it as well from the bottom up. so i moved to trenton and learn the billing system when the customers pay their bill. deliver the new cable boxes, it was a new system in trenton, i helped unroll their sleeves and unloaded the warehouse i loved the business. . i love being around people. i loved being in management at a
young age. david: when you are in business with your father, did you call him dad or ralph, as other people do? brian: i called him ralph. when he had grandkids, he had all his grandkids call him ralph. one of the great things he did for my daughter, who has now just had her own child a few weeks ago, he said every kid learns the word 'no.' that is one of the first words they know. he went on the ground with all little grandbabies and said, yes, yes, yes. one of the most amazing things my wife and i enjoyed with my dad, and i think my siblings and my mom, was his positive attitude about life. it came out for all employees. he had a yes attitude. david: you became the ceo -- brian: we did not use that title within a data myself. 1990 i became the president.
i was about 30 years old. david: did anybody say, is he ready to be president? brian: everybody, including myself. but i was eager to -- having worked for many years, half a dozen years in different jobs in trenton, flint, michigan, in dallas pittsburgh, then , trenton again, back in philadelphia, in the corporate side and finance, my dad was still active but 40 years older than i was. i was 30, he was 70, and he wanted to begin continuity without an abrupt change, so we worked as partners from then on until he died. david: there is a concept called net neutrality. >> brian: to me, it can also be called regulation. some say you are a get net neutrality, at all. we have a great interface called xfinity x1, you can see our
guide, you can go back, do on-demand, and this is all coming from the cloud. it was really a game changer. every click is going out and back faster than you can look at it. if you say tom brady versus russell wilson, you are a sports fan, and we have now added data right there that you can pull up the stats. ♪
liked? brian: it is a great question. television used to be free, now most americans are paying a lot of money for it. every year it can get more expensive. that is the sum total of sports, the cost of actors, many more channels, high definition, and technical capabilities, and if we are passing those increases along that we have experienced, no one remembers that. so that is partly why it is an industry issue, but that is not a good answer. what we have said about at comcast was to not accept that and to try to find a way to emulate some of the companies you just referenced who have a lot of goodwill, so we thought by making our products better, we change the name of the company to xfinity and came up with a product called x1. it took about 10 years, and were building a technology center in philadelphia and we are trying to pivot the company to have a rapid deployment of new products that delight and surprise you all the time.
back that up with advertising and messaging and understanding by the consumer of what it is that you get, and may be the link that was missing after we achieve that was some of our products with service, showing up on time, getting it right the first time, having the network be reliable. david: you ever have problems with your cable? brian: sure. once in a while. david: what do you do? do you call somebody, what do you do? brian: i use it as a learning experience, first of all. we are constantly trying to improve and have a virtuous cycle of repair and improvement. if my cable is out, i use my app, i go back and see how many customers are affected, and there is a culture i believe we have improved massively, but we have a ways to go. david: is it intimidating for the cable repairman to come to your house? they know they better get it right? brian: hopefully a little bit of
both, but ultimately try not to get so much different treatment that it is out of touch with what our customers are experiencing, but i'm sure there is some of that happening. david: cable tv blossomed in the 1980's and 1990's, and then at some point you grew to 20 million customers, and then broadband came along. you had built cables and -- in everybody's homes, then you realized you could use as cables for internet access as well. when did it dawn on you that you could sell more than cable tv to those same customers? -ha momentre was an ah on that. that was a meeting in seattle of a group we formed with other cable companies called cablelabs. we went to see intel, oracle, and microsoft, and bill gates was talking about that someday the data business for you guys will be bigger than the television business. i said to bill, would you consider investing in our industry? we are putting all this fiber optics, wall street hated it.
our stock was low. and this is one of the cycles where you cannot always know the answer, but feel like you should invest and hope that it will work, and he said, i think fiber will change the game for you. how can i help? i said why don't you buy a percentage of the room, and everybody laughed. i said ok, just by comcast. he put $1 billion from microsoft into comcast, no board seat, no microsoft products. david: what kind of return did he get on that? brian: 400%. and he started the broadband wars that have been the beneficiary by consumers for the last 20 years. david: are you worried people will say i don't want to buy my cable tv and will get everything through the internet? is that a problem you have question mark brian: that reality is happening. we have seen it coming. the other ah-ha moment was steve
jobs, who was visiting and we were seeing if we could collaborate with apple a decade ago. he said why don't you put wi-fi in all your cable boxes? i went, what is wi-fi? it was before anybody else. now we have more wi-fi than any company in america and the fastest wi-fi. david: you bought from ge-nbc universal, was that something natural for you? were you afraid you should not be in the content business? brian: there were people who had that worry. we had a dream that the perfect company, if you could create it from scratch, would be in the distribution and the content. both were good businesses, kind of symbiotic. so we had got into a certain scale, and scale matters. we had dabbled in content, the golf channel, regional sports networks, and along came the recession of 2008-2009, and ge wanted to sell nbc universal. we had been knocking on the door for a decade in one day they
said, ok, and we jumped at it. david: things like hollywood studios. sometimes they like to hang out with the stars. that is not you? brian: that is not me. i care about movies, but i have never been on a movie set. david: there is a concept called net neutrality. which 99% of americans probably do not fully understand. can you explain what net neutrality is and why it is a big deal? brian: to me, it can also be called regulation. so what do i think we stand for? what we have tried to say from the date bill gates helped us with the idea for the internet was that you could go anywhere you wanted and you could do so without being slowed down or delayed, or in the case of privacy, someone knowing your behavior in a way you don't want. how do you have a set of rules that gives you the consumer that confidence and certainty, and at the same time, allows for investment and innovation as new applications come along?
we have always said we stand for certain principles. those principles were codified by the fcc, and the court said the fcc did not have authority to codify those principles, so another fcc came along and said here is another way to do it. let's put it under something called title 2, which is a regulatory regime designed for the phone system back in the 1930's. we did not agree with that, and that can get bundled and phrase -- in a phrase net neutrality and it is as if where against net neutrality, and that is not the case at all. david: do you go to from washington time to time to talk to legislators, and is that a painful part of your job? brian: i'd like advocating for comcast. i compassionate about our company and beliefs. i think we represent what the american dream is all about. you start from literally tupelo, mississippi, no business, take risk capital. we have never had a guaranteed rate of return like a phone company.
the have borrowed $60 billion to build the company. no one says we will be here in 50 more years. 50, we have created 150,000 jobs. 90%, 95% here in america, so from time to time, depending on where the pendulum is going, there are proposed things that are going to have real implications and you try to articulate and navigate for -- advocate for that. david: you have cable, broadcast channels, movies -- how do you have time to watch all the things your company is producing? brian: well, i don't see everything we do. i try to see a lot of it. david: if you see something you don't like, do you call them up? david: no -- brian: no. i have a point of view, but i know what i can do and what i shouldn't do. ♪
♪ david: you have cable, also broadcast channels, movies -- how do you have time to watch all the things your company is producing? brian: we grew up in this business. when i started back in 1981, they were just coming out with cable channels. i was very lucky when ted turner called me up and asked me if i would come on his board. i think i was in my late 20's or early 30's, the youngest person on the board. i saw him literally change the world with cnn and change the world by putting nfl games on a new network, tnt, and taking the mgm library and bringing it to cable television and building new channels cartoon network.
, so i always thought it would be nice if comcast could help to do that if we evolve in television. so how do i have the time? i don't see everything we do. i tried to see some of -- david: if you see something you don't like, do you call them up? brian: no. i have a point of view, but i know what i can do and what i shouldn't do. i try to have some discipline on that, but sometimes i just share opinions, but we have some of the best professionals. david: on technology, right now you have to be at the forefront of all kinds of technologies. do you personally review all the new technological inventions? brian: we are building a new technology center, but i can't do every invention. but since it comes down to one remote control and one guide, i do get fairly involved and see things before they come out, try to help the team. david: what gives you the greatest pleasure in the job you have? brian: the fun is that that
answer changes over time. it hasn't been the same thing my whole life. today, sadly, my dad is not here, so there was this wonderful moment where we worked together for a long, long time and we were so lucky. today, we are as a leader trying to figure out where this industry is going, that dynamic change of technology and innovation and things like artificial intelligence and the cloud and the competition, which has never been greater, stimulates you. and trying to think through how to build value for shareholders. david: in college, you were an all-american squash player. brian: i love the sport. the best players in the world, which i never was close, are super and superb athletes, and as good as any athletes in any sport. when i got to penn, i had a squash coach who was the opposite of my dad. i have always said maybe the second or third most influential person in my life, one of the
top -- david: coach malloy. brian: coach malloy. he was an ex-marine, and he drilled into me hard work. winning, strategy, tactics, and i went on and played a great run in squash and had a chance to compete internationally after college. david: now you compete still. you have won the gold medal and silver medal and will play again there? brian: my children have both done it, two daughters and my son said, let's you and i do it, dad. we will go to israel and compete one more time. i proposed to my wife on one of the trips. it has been a significant meaning in my life to be able to compete and represent our country, be a jewish athlete and share my family experiences as we have all played the sport and had a lot of fun with it. david: you are now in your 50's. is it hard to get into shape? brian: i was retired for about 10 years, and it is very hard. that is the short answer.
every bodypart of mine hurts right now from training, but it gives you a purpose. i like goals. you don't always win, but it is fun to try. david: are your children interested in coming to the company? brian: to me, that is a clear answer. you should do what you want to do with your life, not what your parent wants you to do with your life. for me and my family, that is how you end up having a happier life. if it is something you want to try out, great. it comes with the presumption that you're not that good. you only got there because, so it is a higher burden. as i talked to my own kids and they figure out their lives, there are different answers to that question. david: what are your great philanthropic interests? brian: we've just made a really cool involvement with the children's hospital of philadelphia, a genetics center at philadelphia's children's hospital, arguably the number one children's hospital in the
world. so as genetics technology comes along and research, can they continue that leadership? so we created a genetics center. we have been involved in the arts. my wife chaired the building of the new barnes in philadelphia. something really special for this city. dr. barnes' collection was maybe the best impressionist collection outside the louvre in paris. for philadelphia, it gave it some additional world-class stature. david: your father was in the company a long time. you could do this another 30 20, years. is this what you intend to do for the rest of your career? brian: i love what i do. it is hard to imagine something else, but you have to keep the company fresh, so we will take it one day at a time. ♪
♪ it is the newest six-year says tim cook couldn't test took over towards the. each year they become more cook own. he unveiled the apple watch an apple music with people that the latest acquisition in apple history. he has taken on issues like the environment, philanthropy, equality and education. he stood up to president obama on user privacy and make a dialogue with president trump. now as iphone sales plateau