As with so many industries, privatization has taken its toll on the number of public cable companies. Cox Communications and Insight Communications were the first to go, and Cablevision
Now we're left with industry leader Comcast
Last month, Craig Moffett, the capable cable analyst at Bernstein Research, ran the obviously large numbers that would be involved in a Comcast privatization transaction. According to his math, with the company's market value now greater than $80 billion, and with the expectation that it will generate nearly $12 billion in EBITDA this year, CEO Brian Roberts and his team likely would be able to borrow about $72 billion and add another $10 billion in equity to get the deal done.
I won't put off my Foolish friends by tossing out many more numbers, except to say that the company already owes $30 billion. Under Moffett's projections, the entire post-privatization debt load would be about $102 billion. I can't quarrel with the contention that, as gigantic as the numbers might be, Comcast could be taken private. Instead, I don't think that approach would fit Roberts' pistol, as we say in Texas.
I first got to know Comcast when it had fewer than 7 million subscribers, in the earliest days of this decade. Since then, through a spate of acquisitions, including that of AT&T's
However, I don't think the Roberts team is ready to slow that process of shaping their company. And the same debt capacity that would be eaten up in a privatization effort could be used for other meaningful acquisitions. Indeed, with competition looming from the likes of AT&T and Verizon
It'll be fun to watch the further unfolding of the Comcast story. In the meantime, I believe that Fools with an appetite for media investments would do well to consider buying shares in this unusually solid company.
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