I saw this in today's Wasington Post. I think this say's it all.
It's a safe bet that no one can identify better with Disney's Michael D. Eisner these days than former AT&T chief executive C. Michael Armstrong. After all, Comcast's raid on Disney is a carbon copy of its successful attack three years ago on AT&T's cable-TV business, which gave Armstrong a new, unwelcome gig as Comcast's low-profile nonexecutive chairman. In fact, Armstrong talked with Eisner at length in the summer of 2001, after Comcast launched its raid. He hoped Disney would help AT&T fend off Comcast, but Eisner wouldn't play. So let's ponder what a Mike-to-Mike memo written today might look like. As they say in Hollywood, this is based on a true story.
Dear Mike:
I bet you're wishing now that you had listened to me. Remember that strange scene in your back yard in July 2001? When you and I and various underlings sat around in suits, drinking the iced green tea your wife served? Wearing suits outdoors in July in Southern California -- what were we thinking? Comcast had come out of nowhere with a $58 billion bid for my cable company, and I wanted Disney or Microsoft or somebody with money to make an investment in AT&T Broadband so we could stay independent. But you stood aside, Comcast bought our cable business and that made it big enough to go after Disney.
Good luck to you -- you're going to need it. I've seen this particular Comcast show before. A fax shows up putting your company in play. And before you've even made copies for your lawyers, Comcast goes public with its offer. It's got legions of investment bankers ready to go, it's arranged meetings with big shareholders, it's got PowerPoint presentations showing how much more profit it wrings from its businesses than you get from yours. To keep you on defense, Comcast leaks like a sieve to the news vultures. To steal a line from Churchill, the media "are either at your feet or at your throat." If you've read your coverage lately, you know they're not at your feet.
Comcast, as you now see, is about timing. Show weakness on Wall Street and they're on you like the hunters after Bambi's mother. Look what happened to us at AT&T. We got stuck with too much debt, our cash flow sank, Wall Street turned on us, we had to break ourselves up. That put our cable company in play. Wall Street was down on me -- but it's really down on you. After all, I had an excuse: AT&T was messed up when I parachuted in from the outside. But you've run Disney for 20 years. You're 61, you've got no succession plan, your corporate governance stinks, you've made a guy named Disney an enemy, Steve Jobs jobbed you with Pixar. Your rep is as underwater as Atlantis.
Comcast caught you cold by announcing the same day you were meeting with big shareholders to sell your latest turnaround plan. So you couldn't hide behind your lawyers and do your imperial-CEO act. You had to say something. And all you could say was that Comcast was trying to buy you on the cheap and that long-term shareholders will make more money with you than by selling out.
That won't fly. I told the Street my cable business was turning around, which it was. Did anyone care? Nope. All Wall Street cares about is making money right now. Sooner or later, Comcast will raise its offer by putting more stock on the table and maybe throwing in some cash, and we'll be sticking a fork in you. You're done.
The Roberts family, which runs Comcast, is pretty clever (in case you hadn't noticed). My board didn't want to sell to Comcast because the family had 88 percent voting control by owning "supervoting" shares that were less than 3 percent of the company's stock. We got them to raise their offer, and to cut their voting control to 33.3 percent. That's still enough to keep control. And the family endowed its special stock with magic expansion powers -- they'll keep the same one-third voting control no matter how many new shares Comcast issues to buy you. This means that Comcast can raid anyone, but no one can successfully raid Comcast.
Comcast told us it would call the combined company AT&T Comcast. That made us feel better. Two seconds after the deal closed, they renamed the company Comcast. They made me nonexecutive chairman, but I don't say anything in public and I'm in an office with the ad-sales guys in New York. That's like 100 miles from the action at headquarters in downtown Philadelphia. You're a poster boy for bad behavior -- imagine how they'd treat you.
So give it up. It's not about you, Mike, it's about what Mickey Mouse is worth. Pack it in before they throw you out.
-- Cheers, Mike
Sloan is Newsweek's Wall Street editor. His e-mail address is
sloan@panix.com.
I do not read Time magazine because I don't find it very entertaining. Also, IMO, customer service is customer service . Cable company, 
