Technology

COMCAST CEO TELLS CNBC: CORD CUTTING OVERBLOWN AMID BEST BROADBAND SALES IN 10 YEARS

The following is the unofficial transcript of a CNBC EXCLUSIVE interview Comcast CEO Brian Roberts and CNBC’s Jim Cramer on CNBC’s “Mad Money w/ Jim Cramer” (M-F 6PM – 7PM) which aired today, Thursday, September 6th at 6:00PM ET. The interview took place during Comcast’s 2018 NFL Countdown to Kickoff Celebration in Philadelphia, PA. The following is a link to video of the interview on CNBC.com.

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Comcast BRIAN ROBERTS
By Comcast [Public domain], via Wikimedia Commons
JIM CRAMER: BELIEVE IT OR NOT I DIDN’T COME TO PHILLY JUST TO WATCH THE EAGLES. IT’S ALSO BEEN AN OPPORTUNITY TO VISIT THE MOTHERSHIP, MEANING COMCAST, THE OWNER OF NBCUNIVERSAL, AND THAT’S THE COMPANY THAT SIGNS MY PAYCHECKS, IN THE TOWN I GREW UP.

AND ANYBODY WHO HAS EVER HEARD ME SAY THE WORD "WATER" OR "MERRY CHRISTMAS" KNOWS THAT PHILADELPHIA IS MY REAL HOME. NOW ALL YEAR, PEOPLE HAVE BEEN FOCUSED ON THE HIGH PROFILE ATTEMPTED MERGERS IN SPACE, WITH COMCAST CURRENTLY TRYING TO ACQUIRE SKY, THE BIG BRITISH MEDIA CONGLOMERATE. OR THEY’VE HEARD ABOUT CORD CUTTING.

BUT THE TRUTH IS COMCAST IS DOING WELL RIGHT NOW. THEY GREW EARNINGS AT A 30% CLIP LAST QUARTER. AND THEY’RE NOT YOUR FATHER’S CABLE COMPANY ANYMORE. THEY’RE A TECH COMPANY FOCUSED ON CONNECTIVITY, WITH YOU THE CUSTOMER. YET THE DARN THING, STOCK IS DOWN ROUGHLY 10% FOR THE YEAR. I THINK YOU’RE GETTING A CHANCE TO BUY A NICE BLUE CHIP STOCK AT A DISCOUNT. IT SELLS AT JUST 13 TIMES EARNINGS, WHICH IS PRETTY INEXPLICABLE WHEN YOU THINK ABOUT. BUT DO NOT TAKE IT FROM ME. LET’S CHECK IN FROM OUR SPECIAL GUEST, BRIAN ROBERTS, THE CEO AND CHAIRMAN OF COMCAST, WHO HAPPENS TO BE MY BOSS’ BOSS’ BOSS. MR. ROBERTS, WELCOME BACK TO "MAD MONEY." GOOD TO SEE YOU, BRIAN. HAVE A SEAT. BRIAN IT IS GREAT TO SEE YOU.

Comcast CEO's biggest disappointment on Fox deal fallout was what it said about Comcast from CNBC.

BRIAN ROBERTS: WELCOME HOME. GLAD TO HAVE YOU BACK.

CRAMER: AND THANK YOU FOR MAKING HOME PRECIOUS AND FABULOUS. LET ME ASK YOU: SEVEN MONTHS AGO -- SEVEN MONTHS AGO, A GAME WAS PLAYED, A 60 MINUTE GAME. AND I THINK THAT GAME, AND ITS OUTCOME CHANGED THE CITY THAT YOUR FAMILY’S FROM AND MY FAMILY IS FROM. I KNOW IT WAS 41 POINTS US, 33 THEM. BUT DO YOU FEEL IT? AND HOW CAN ONE GAME CHANGE A CITY SO MUCH?

ROBERTS: WELL, YOU CAN FEEL -- AND EVERYONE IS SO EXCITED FOR TONIGHT COMING BACK. AND JUST SAW OUR FRIENDS’ SUPER BOWL RING, IT JUST MEANS YOU’RE THE WORLD CHAMPION. AND – BUT, FOR PHILADELPHIA WE’VE BEEN STARVED MY WHOLE LIFETIME. I’VE BEEN TO THREE SUPER BOWLS AND WE NEVER -- THIS WAS IT. AND OF COURSE, BEING ON NBC WAS PRETTY SPECIAL. JUST ICING ON THE CAKE.

CRAMER: NOW, I -- WE’RE BUSINESS PEOPLE. I SEARCHED FOR A METRIC, SOME MEASUREMENT THAT WOULD INDICATE HOW MUCH MORE VALUABLE OUR GREAT CITY IS THAN IT WAS BEFORE THAT WIN. HOW DO WE PUT IT TANDEMLY?

BRIAN ROBERTS: YOU KNOW, YOU’RE GREAT AT FIGURING THAT STUFF OUT. I’LL TELL YOU WHAT WE DID. WE PUT A LITTLE WILLIAM PENN STATUTE ON THE TOP OF THE BUILDING, WHICH OF COURSE THERE HAD BEEN A CURSE WHEN WE WANTED THE CITY BUILT ABOVE WILLIAM PENN’S HAT – THAT WAS THE FOLKLORE. THE FIRST BUILDING WE PUT A STATUTE THERE, WE WON THE WORLD SERIES. THE SECOND BUILDING WE WON THE SUPER BOWL. HOW DO YOU MEASURE THE VALUE? IT’S PRETTY EXCITING.

CRAMER: I THINK YOU MEASURE IT BY SAYING THAT WE’RE WINNERS NOW AND NOT LOSERS. OKAY, LET’S TALK SOME BUSINESS. ABOUT A YEAR AGO COMCAST FLAGGED THE SLOW DOWN OF VIDEO SUBSCRIBERS. IT’S SNOWBALLED INTO SOME STRANGE NARRATIVE WHERE PEOPLE JUST SAID, “YOU KNOW WHAT, IT’S REALLY ABOUT – IT’S ABOUT CORD CUTTING, IT’S ABOUT THE DEATH OF BROADBAND BECAUSE IT’S SLOWING. I NOW LOOK AT YOUR LAST QUARTER, AND I HAVE TO TELL YOU, I THINK THE DEATH OF CABLE SEEMS VERY MUCH EXAGGERATED, VIDEO SUBLOSSES SEEM TO BE DECELERATING, FRANKLY, AND BROADBAND SUBS SEEMS TO BE ACCELERATING. SO IS IT TIME TO SAY THE RENAISSANCE IS BACK?

BRIAN ROBERTS: I DO THINK THERE IS SOMETHING IN THAT BIG TIME. WE SAW A SHIFT TO STREAMING VIDEO. FIRST REACTION IS THIS IS BAD. REALITY IS YOU NEED BROADBAND, YOU NEED THE FASTEST INTERNET, BEST WIFI. WE HAVE THE BEST IN THE NATION. SO IN IN THE SECOND QUARTER – AND FOR THAT, FOR THE FIRST HALF OF THE YEAR, BUT PARTICULARLY LIKE YOU SAID IN THE SECOND QUARTER, WE HAD THE BEST BROADBAND SALES IN 10 YEARS. AND IT’S A 20-YEAR-OLD PRODUCT.

SO IS THAT A ONE MONTH PHENOMENA, ONE QUARTER PHENOMENON? I DON’T THINK SO. WE’RE DOING WELL AND WE’RE CONTINUING AND I THINK THAT’S BECAUSE WE’VE GOT CONNECTIVITY -- AS WE PIVOTED THE WHOLE COMPANY AND SAID, “OKAY, VIDEO IS CRITICAL. SOME VIDEO CUSTOMERS DON’T WANT THE BIG PACKAGE, FINE.” WE’RE FOCUSING OUR VIDEO ON THE FULL EXPERIENCE. WE CALL X1, IT’S BEEN GREAT.

BUT OVER IN BROADBAND, WE’RE SELLING BROADBAND UNTETHERED. WE’RE FINDING LOTS OF CUSTOMERS REALLY ENJOYING THAT PRODUCT. THEN WE MOVE INTO BUSINESS SERVICES WITH BROADBAND. AND WE HAVE A $7 BILLION BUSINESS THAT DIDN’T EXIST 10 YEARS AGO. SO THE COMPANY IS MORE A CONNECTIVITY COMPANY THAN IT’S EVER BEEN AND WE’RE HAVING GREAT SUCCESS.

CRAMER: ALRIGHT, SO WHAT DO YOU SAY TO PEOPLE WHO JUST LISTENED TO WHAT YOU JUST SAID AND GO “WAIT A SECOND, THE STOCK IS DOWN 10%, THAT’S WHY THEY HAVE TO GO MAKE A VERY BIG ACQUISITION IN SKY AND THEREFORE WE SHOULDN’T REALLY NECESSARILY BELIEVE THAT THINGS ARE AS GOOD AS YOU –”

BRIAN ROBERTS: SO YOU’RE JUST GOING TO HAVE TO SEE OUR RESULTS. YOU KNOW, COMCAST – WE’VE BEEN IN BUSINESS A LONG TIME, AND WE’RE AN OPERATING COMPANY. AND YOU KNOW STEVE BURKE REALLY WELL AT NBC. DAVE WATSON, WHO RUNS CABLE IS REALLY DOING A FANTASTIC JOB. AND THAT’S ONE OF MY DISAPPOINTMENTS THIS YEAR, IS THAT FOX AND SKY, DRIVEN BY RUPERT MURDOCH’S DECISION TO SELL THE COMPANY, NOT OUR DESIRE TO CHANGE WHO WE ARE, WHY WOULDN’T WE LOOK AT IT? WE FOUND IT WAS UNDERVALUED. WE PUT IN A PRICE, EVENTUALLY DISNEY OFFERED MORE AND WE WALKED AWAY.

BUT PEOPLE THEN TOOK THAT AND MADE A NARRATIVE THAT SAID WE DIDN’T LOVE OUR CORE BUSINESS, WHEN IN FACT OUR CORE BUSINESS IS HAVINGA RENAISSANCE, AND THAT’S BECAUSE PEOPLE WANT TO BE CONNECTED, THEY WANT WIFI EVERYWHERE, THEY WANT -- WE NOW HAVE 20 TABLETS AND DEVICES IN A HOME. OUR POWER USERS USE 300% MORE, 10% OF OUR CUSTOMERS HAVE 600 GIGABYTES A MONTH, AND THAT’S LITERALLY TRIPLE WHAT THE AVERAGE CUSTOMER TAKES. WHAT DOES THAT MEAN? IT MEANS IN A COUPLE YEARS, WE ALL WANT TO BE WHAT THE POWER USERS ARE DOING TODAY AND SO OUR CAPACITY IS GREAT.

CRAMER: YOU’RE DESCRIBING A TECHNOLOGY COMPANY THAT IS GETTING MORE OUT OF EACH CUSTOMER BECAUSE THE CONNECTIVITY ALLOWS YOU TO ANSWER EXACTLY WHAT A CUSTOMER REALLY WANTS. THIS IS A DIFFERENT KIND OF CABLE COMPANY. THOSE WHO HAVE COMCAST, WE HAVE A CABLE COMPANY, WE DON’T PARTICULARLY LIKE THEM AND THEY DON’T KNOW WHAT WE WANT. SOUNDS LIKE YOU’VE BEEN ABLE TO HARNESS WHAT PEOPLE WANT AND THEN GIVE IT TO THEM.

BRIAN ROBERTS: WELL, WE’VE PIVOTED THE COMPANY. WHAT YOU’RE SEEING BEHIND YOU IS OUR TECHNOLOGY CENTER AND WE HAD A CHANCE TO WALK THROUGH IT TODAY. ABOUT 10 YEARS AGO WE SAID THE WORLD IS CHANGING AND WE WANTED TO CHANGE THE COMPANY. WE HAD A NEW CHIEF TECHNOLOGY OFFICER BACK THEN, TONY WERNER. HE’S BUILT AN ENTIRE CULTURE AND ORGANIZATION. AND I THINK IT’S SECOND TO NONE. AND WHEN WE FINALLY RAN OUT OF SPACE HERE, WE SAID, YOU KNOW WHAT, IT’S TIME TO PIVOT THE COMPANY FROM A FINANCE COMPANY AND CASHFLOW ONLY AND CUSTOMER PRODUCTS TO INNOVATION, TECHNOLOGY, AND SOMETHING THAT YOU WON’T RECOGNIZE.

CRAMER: BRIAN, I RESPECT HISTORY WHEN IT COMES TO PICKING STOCKS. I KNOW THAT WHEN YOU MAKE A BIG ACQUISITION, STOCK DROPS. STOCK AVERAGES ABOUT 7%, AND THEN AFTER THAT, IT’S OFF TO THE RACES.GIVE US THAT NARRATIVE. MAYBE THAT’S WHAT WE SHOULD THINK ABOUT SKY. BECAUSE WE DON’T KNOW YET WHAT’S GONNA HAPPEN WITH SKY?

BRIAN ROBERTS: CAN’T TALK ABOUT SKY, BUT YOU’RE RIGHT. HISTORICALLY, WHETHER IT WAS QVC, NBC, OR AT&T: EACH ACQUISITION, WE HAVE A – YOU KNOW, WE HAVE TO PROVE IT. WE HAVE A SHOW ME ATTITUDE BY INVESTORS. I RESPECT THAT AND UNDERSTAND THAT. AND OUR JOB IS TO SORT OF NOT LET THAT JACKET THE MISSION AT HAND, WHICH IS BUILD VALUE FOR THE SHAREHOLDERS. I LOOK AT IT AS IF YOU SAY TO ME “WHAT ARE YOU MOST PROUD OF?”

WELL MY DAD TOOK COMCAST PUBLIC IN 1972. IF YOU BOUGHT 1,000 SHARES, $7,000, YOU WOULD HAVE JUST ABOUT $12 MILLION, 17% COMPOUNDED RETURN FOR 48 YEARS. YOU PUT IT IN THE S&P 500, YOU’D HAVE $75,000 – ABOUT 15 TIMES LESS MONEY. SO WE’RE LOOKING FOR VALUE OPPORTUNITIES, WE’RE LOOKING FOR STRATEGIC FITS AND WE HAVE A MANAGEMENT TEAM THAT LIKES TO BUILD SHAREHOLDER VALUE. AND SO SOMETIMES, WHEN WE SEE SOMETHING -- BY DEFINITION, YOU’RE THE HIGH BIDDER AT THAT MOMENT, IT TAKES A LITTLE WHILE TO CONVINCE PEOPLE, YOU’VE GOT TO PROVE IT. AND I HOPE WE’VE DONE THAT –

AND I HOPE WE -- NBC IS PROBABLY THE BEST ACQUISITION WE EVER MADE. AT THE TIME WE WERE A CABLE COMPANY. WE WANTED TO – WE SAW CONTENT BEING MORE VALUABLE OVER TIME. AND NOW OF COURSE EVERYONE WANTS TO GET INTO CONTENT. AND THEY’RE LOOKING FOR WHAT WE BOUGHT EIGHT YEARS AGO, NINE YEARS AGO. SO THE SAME THING WE THINK CAN BE TRUE IN INTERNATIONAL, IT CAN BE TRUE IN CONNECTIVITY AND IN BROADBAND. OUR JOB IS TO BE ONE STEP AHEAD AND THEN EVENTUALALY COME TO INVESTORS AND TRY TO MAKE THE CASE ONCE WE’VE GOT THE GOODS TO PROVE IT.

CRAMER: THERE IS A LOT OF NEWS EVERYDAY. TODAY, LES MOONVES, LOOKS LIKE HE MIGHT BE OUT. WE HAVE CONTROVERSY IN SPORTS, WITH COLIN KAEPERNICK. IS THIS JUST AN ERA WHERE EVERYBODY SHOULD EXPECT THAT ENTERTAINMENT IS IN FLUX? BECAUSE I’VE GOT TELL YOU, I’M USED TO TALKING ABOUT INSIDE THE LINES, NOT OUTSIDE THE LINES.

BRIAN ROBERTS: YOU KNOW, IT’S A VERY UNUSUAL PERIOD. WE’RE ALL LEARNING AND PLAYI G BY A NEW SET OF RULES EVERYDAY. AGAIN, I THINK WHAT MAKES COMCAST GREAT IS A CERTAIN CONSISTENCY OF OUR TEAM, OUR FOCUS AND TRYING TO GIVE OUR CUSTOMERS ULTIMATELY AND VIEWERSPRODUCTS AND SERVICES AND NEWS. AND YOU KNOW, WE DON’T ALWAYS, YOU KNOW, FIND THAT AN EASY OR A COMFORTABLE TIME TO BE. BUT WE DO THE BEST WE CAN. I THINK BY AND LARGE, WE HAVE A VERY UNIQUE, SPECIAL COMPANY WITH COMCAST, NBC, UNIVERSAL. THE CULTURE, THE PEOPLE, THE TEAM WORK, THAT’S WHAT ULTIMATELY OVER 50 YEARS, OVER 20 YEARS, OVER 10 YEARS, YOU GET THE RESULTS THAT -- WHAT I JUST SAID IN THE STOCK, DOESN’T HAPPEN IN ONE MOMENT. AND YOU’VE GOT TO TRY TO TURN THE NOISE OFF AND HAVE SOME CORE VALUES.

CRAMER: WELL, I THINK THAT YOU – I LOVE “TURN THE NOISE OFF.” BECAUSE OUR VIEWERS THINK LONG TERM. WE’RE NOT TRYING TO BE IN COMCASTT TODAY AND OUT TOMORROW. I LIKE THAT PERSPECTIVE, THE $12 MILLION PERSPECTIVE. THAT’S THE WAY TO BE. OKAY, THAT’S BRIAN ROBERTS, CHAIRMAN AND CEO OF COMCAST CORPORATION - CMCSA! STICK WITH CRAMER!

BRIAN ROBERTS: THANK YOU.