Interview Date: Thursday July 27, 2000
Interview Location: Philadelphia, PA USA
Interviewer: Tom Southwick
Collection: Hauser Collection
SOUTHWICK: I'm Tom Southwick, and this is part of the Oral History Program for The Cable Television Center and Museum in Denver. It's July 27, the year 2000 and we're with Ralph J. Roberts who's the founder of Comcast Corporation here in his headquarters in Philadelphia. Mr. Roberts, if I may, I'd like to start by asking you a little bit about your childhood, where you grew up, what your parents did, what were some of the important events in your young life?
ROBERTS: Well, I grew up in New Rochelle, New York, which the Chamber of Commerce called "Little Island by the Sea" or some very romantic name, and it was on the Long Island Sound. I was there right through high school and then went to the University of Pennsylvania and sort of stayed in Philadelphia. The war was declared in 1941, which was the year I graduated, and I was fortunate enough to get a commission in the Navy and that's where I spent my war years.
SOUTHWICK: In Philadelphia, in the Navy?
ROBERTS: I'm sometimes ashamed to say it, but I was in Philadelphia for the entire time. I was on what they call an "LMD", a "Large Mahogany Desk".
SOUTHWICK: And what did your father do?
ROBERTS: My father was a manufacturing chemist, who also owned a chain of drugstores, and as they said, the fathers lived in New York and slept in New Rochelle.
SOUTHWICK: And did you have particular interests as a young man in terms of what your career might be? Were you interested in following in your father's footsteps or some other area?
ROBERTS: Well, my father died when I was 12 years old, and I guess as far as business is concerned I thought I'd always find a way to get into my own business, even at that age.
SOUTHWICK: And after the Navy, what did you do?
ROBERTS: After the Navy I joined a partnership with a fellow named Carol Stover, who was an engineer and we knew that the manufacturing facilities in the United States had to change because they were all set up for manufacturing war materials, and there were no products around for a lot of these manufacturers to make. So my partner, who was a very ingenious and inventive type fellow, got together with me and we developed some inventions that could be translated into real product and we sold them. For example, one product we sold was bottle handling equipment that went into Coca-Cola, and that was lifting the bottles out of the crates. It was the sort of a thing that went sort of criss-cross, it had two handles, and you put it down on top of the necks of the bottles, lifted them up and put them on a conveyor belt. That was our best product. Another product we had was called scented ink; it was perfumed ink, so if a girlfriend wanted to write to her boyfriend, when you opened the envelope this bouquet of fragrance came out. And finally, a product that we made was golf clubs, and here we went into the manufacturing ourselves, and the golf clubs were called the "Century Putter" because a shaft went down just behind center – you're not allowed to make a shaft that goes dead center, and then it becomes a mallet – they're back of dead center, but we changed the angle. There were three angles – upright, medium, and low – and I took these and I went from Philadelphia to Miami and stopped at every sporting goods shop and sold these golf clubs. I must have sold 100,000 golf clubs because you couldn't buy golf clubs, they weren't being made at that point, and putters are the only club that a guy will buy another of them without worrying about a whole set of clubs. Well, one day I was out on the putting green, because that's the way I worked, I'd go on the putting green and a pro would watch and then he'd come over and buy the club, and I hit the ball and the shaft went around like a circle, it bent completely. So I panicked and I called up my partner and said, "What happened?" He said, "Geez, the last 5,000 clubs I forgot to send to the heat treating department." So I said, "I think it's a good time for us to go out of business," which is what we did do.
SOUTHWICK: So the shaft is essentially melted...?
ROBERTS: It was very soft, so you hit the ball suddenly and it comes and bends. It was not very good. I also had an interesting experience with that club – in order to promote it, Bob Hope was in town, in Philadelphia, doing a show one time and I got backstage with the help of the Inquirer photographer and said to Bob Hope as he was leaving the stage, "Would you mind holding this club? I'm a veteran and I'm in the golf club business. I'd love to have your picture with the club." He said, "Sure, kid." He takes the club and he holds it and he stands as if he's going to putt with it, and I'm snapping away, or my friend from the Inquirer is, and when he left we came out with a big spread that said, "Bob Hope Centric Putter". We never got permission from him or anybody else, and that was our promotional piece.
SOUTHWICK: Wow! An endorsement from a big star. And what was your venture after the manufacturing experience?
ROBERTS: After that I went and got a real job. I went to work for an advertising agency in Philadelphia and I was there for quite some time.
SOUTHWICK: And what did you do?
ROBERTS: I started off as a copy writer and I became an account executive. One of my accounts was Muzak Corporation, the local Muzak operator, and I was invited to New York by the head of Muzak, who also owned Encyclopedia Britannica, and he offered me a job to be a marketing and advertising director of their company and I accepted that job and I commuted to New York for about 2 ½ years. And then I was offered a job at a company that manufactured men's belts, wallets, and jewelry called Pioneer, and I accepted that job in Philadelphia. I was tired of commuting anyway. I didn't think that I would hold that job in New York forever because a typical example is one day Bill Benton, who was the guy that started Benton and Bowles Advertising Agency and also was a Senator, called me up one day and he said, "Ralph, I'm going to land in St. Louis tomorrow and I'd like to have one line that you can give me that's quotable, that I can state. I'll call you back in an hour." When I got home that night I said, "You know, honey, it's time for me to look for a new job. I'm sure I can't keep up that good fortune." I don't remember what the line is, by the way.
SOUTHWICK: You were committed to staying in Philadelphia – you didn't want to move to New York?
ROBERTS: Well, I had three children at that time and I didn't want to uproot everybody and move to New York, and New York was in those days about an hour and a half away, and sometimes I would stay overnight in New York and come back to Philadelphia two nights later. When I went to work for Pioneer I was in charge of their marketing and advertising, and eventually, when I went there I asked them for an agreement that they wouldn't sell the business without giving me a chance to buy it – right of first refusal – and they agreed to do that. One day the owners came in and said, "We just agreed to sell the business to Swank." This company was the second largest belt manufacturer, but they also made jewelry and wallets and leather goods, 15,000 stores they sold in in the United States. So I said, "Wait a minute, you gave me a right of first refusal." He said, "Well, you don't have any money. How are you going to do it?" I said, "Let's go down and talk to the Philadelphia National Bank," and I sort of convinced them that if this business left Philadelphia they'd lose 200 or 300 jobs and they ought to help me out and buy the company and I'd pay them back someday. I remember I said, "How about a pay the interest," when they agreed to do it, they said, "You just raise your salary." In those days interest was maybe 3%. Well, I ran that business for five or six years, and one day I opened the newspaper and there was a big ad for something called Sans-A-Belt, beltless slacks, this was a new rage. I thought, "Gee whiz, if this goes on I'll be out of business," because I'm making belts as a principle product. I called up my buddy, Ray Hickock, and said, "How'd you like to buy my business?" He's been asking to do that for some years, and he said, "Great." So I sold the business to Hickock. Right after that, Hickock had a heart attack and he called me up and said, "You've got to come up here and run both businesses," he was from Rochester, "because my father's will said that if I can't run the business physically able to, that I'd have to turn it over to my brother, and my brother, as you know, is not a very smart fellow, and I'd rather have you there and the bank would give permission and when I get better you can go home and I'll be okay." So I felt obligated to do something and I did that. In the meantime, I took the money that I had gotten from selling the business and went into the venture capital business, and what I did was I sort of financed people that had great ideas that were new – a lot to do with the computer, a lot to do with leasing, and several other businesses – and one day, I meet a guy named Dan Aaron, who had been working for Jerrold.
SOUTHWICK: Now did he call you to come to see you?
ROBERTS: The story is that he was tired of working for Jerrold and he wanted to be a broker. He saw all the money that Daniels was making and he figured I can do that too. So he got a hold of his first client, who was a fellow named Pete Musser, who today is head of Safeguard, a very successful business, and he and Pete Musser decided they would find somebody to buy the business, and the business at that time was Tupelo, Mississippi. It had a few thousand subscribers and it wasn't going anywhere too fast, and the story they tell is one day he and Pete, they couldn't find anybody to buy it, and one day he and Pete were walking down the street and Pete said to Dan, "Here comes our fish. He just sold his business and he's got a lot of money." So between the two of them they sold me Tupelo, Mississippi and that was the beginning of our introduction to the cable business. I didn't pay too much attention to Tupelo because the deal with Dan was I'd only buy it if he would come and run it because I didn't know anything about cable, I didn't even know what it was. And Tupelo – nobody every heard of that, except I later found out that it was the birth place of Elvis Presley.
SOUTHWICK: And you had an accountant at Pioneer who kept your books and did your taxes. Is that right?
ROBERTS: Well, we had an accountant... when I sold the business what I did was I kept a cosmetic and toiletry business that I started called Mark Two, and so I still used Touche Ross, who was our accounting firm, I had a bookkeeper and my secretary and that was the whole company. Julian Brodsky had been an accountant over at Touche Ross when I was in the belt business. One day he came in to see me – this was after we bought Tupelo, I believe – he said, "You're going in the cable business. I think that's a great business. I'd like to come and go to work here." I said, "Julian, there's no room for you here, we're in these tiny offices, and I'm not sure I'd know what to do with you." He says, "Well, instead of paying Touche Ross you'll pay me. And the way I'll work it out you'll come out even. We'll pay them a little something but really I'll do all the work." So I said, "Okay." And sure enough, one day he comes in with a card table and a chair and he says, "Here's my furniture." And he set it up. So it was really, I guess, Dan ran the business, he knew the cable business; I was still doing the financial work and making placements for various investments; and Julian did the accounting and developed, as it happened over the years, some very innovative methods of financing cable systems, which certainly worked to our advantage. So, let's see, after that...
SOUTHWICK: What did you think of the cable business as you got into it?
ROBERTS: I didn't think very much of it. The business I was in, belts and wallets, were a very promotional business. You had all kinds of promotions, you had colors, you had all kinds of exciting things – gift merchandise – and you'd set up promotions with the department stores. It really was a venturesome kind of activity, I thought. The cable business, you put up a tower, you run a line down through the telephone poles, you charge everybody five dollars a month, and you don't do anything. So it didn't seem very appealing to me. But as I began to look at what was happening, I realized the cable business was the best of all the ones I had invested in and decided to go forward full boat. And I guess the next cable system we bought, I think, was in Sarasota, and again Dan was the guy who ran the business. It was exciting once we realized you got to develop programming and you could do other things that would make people want to buy... people loved cable television because more is better.
SOUTHWICK: This was in the early 1960s?
SOUTHWICK: And did you start at that time to get involved with the industry in terms of going to the trade shows and meeting some of the other people?
ROBERTS: I got around and met other operators. That's one of the ways you learned the business by talking to people who had been in it longer than I had.
SOUTHWICK: Who were some of the ones that impressed you?
ROBERTS: Well, I think Chuck Dolan was always a hero.
SOUTHWICK: Why was he your hero?
ROBERTS: He started Home Box Office and later was able to get into the cable business directly, and he was probably the most innovative of most of the operators, I thought. And of course we became friends with John Malone. We were people who other people were willing to partner with because we seemed to be just reasonable operators, and we partnered, when we bought Westinghouse, with TCI...
SOUTHWICK: ATC was part of that deal?
ROBERTS: ATC, yes, and then we split it up between us and we also bid for Storer and eventually we got that. We lost at first to KKR; they overbid us by a very small amount. So we just kept growing after that.
SOUTHWICK: And how did you grow? How did you raise the money to do this? Julian has done an oral history with us and described in some detail, but were there certain principles you had as to how risky you were willing to be?
ROBERTS: Well, I was very risk averse. I didn't want to gamble the whole company on any one system, so what we did was we financed each system by itself and the manager and everybody knew that that system had certain obligations to pay off, and it protected the overall company in case one of them went down the drain. So we paid a little more interest for our money, but we slept every night. The smartest guys in the business didn't give away any equity. They held on, they borrowed as much as they could, and because the industry went up, they all ended up with far more worth in their pockets than somebody who was as conservative as I was.
SOUTHWICK: But you did end up going public.
ROBERTS: We went public in 1972. The stock came out at $7, and I think if you'd bought 1,000 shares at that time you'd have 3 million dollars today, so the thing really grew like topsy.
SOUTHWICK: Fantastic. Now, in the late '60s, the federal government began imposing some regulations on the cable industry, in the early '70s companies began to experience some problems because of that. Did that affect Comcast's growth or were you secure against that?
ROBERTS: We were always very financially secure because we always had a pot of money, and the reason for that was if the banks got too tough with us we could say, well, we'll finance it ourselves. So by keeping large amounts of cash I think we felt safer about it. In order to secure the money to buy Tupelo I went back to the Philadelphia National Bank, which had financed me to buy the belt company and the bank very willingly, because I knew them quite well, gave me the money and it was arranged that I would pay them back in the seventh year the entire amount. After I'd been in business with this company about three years I realized I could never pay them back in seven years because nobody really told me about capital expenditures and extensions.
SOUTHWICK: That you'd have to reinvest in the system.
ROBERTS: That you'd have to reinvest the money and keep making the needed capital to make the extensions in the business. So I went back to the bank – the guy's name was Jack McDowell – and I said, "Jack, this business can't pay off in seven years like we were told." Everybody told me in the beginning, in seven years you've got your money back. I said, "We need 12 years." So he said, "Wow, let's go find an insurance company." And so he and I went out and we got the Home Life Insurance Company, who gave us the first 12 year loan for cable, and Julian made projections as to how we would pay this back and how it would operate, and we came within 5% after 12 years to have it all paid off. And the payments that we made, because I think they gave us a certain number of years as a standstill after that, we started a payment program. So that set a pattern for us and from then on we only borrowed long-term money.
SOUTHWICK: And that was one of the first, maybe the first, insurance companies that were involved in financing cable television.
ROBERTS: I think it was. It changed the whole complex of financing cable.
SOUTHWICK: And tell me a little bit about the advent of satellite television from your perspective. How did that change the business?
ROBERTS: I think it was 1972, I'm not sure, that two things happened. One was Ted Turner in Atlanta putting up Channel 17. That enabled us to go all through the south and buy and develop cable properties because Channel 17 out of Atlanta was considered the greatest thing since sliced bread, and that was a big thing that he put it on the satellite. What amazed me was that when he applied to the FCC for the rights to do that, none of the networks objected. They all thought Ted Turner was crazy, and here overnight he created another network because he could go to anyplace in the United States. The other thing with the satellite was Home Box Office, and when that went up on the satellite that enabled us to go after the big cities because they were interested in movies without commercials, and that was a major turning point, I believe, for the cable industry.
SOUTHWICK: Before we get into the city franchising, were you concentrated in particular areas? Did you have a regional strategy as you grew, or did you just take advantage of whatever...?
ROBERTS: We took advantage of whatever came along. We did know that when we were in Mississippi that anything around that area we thought we would try to get a franchise for. However, when we went to Michigan, we began to concentrate a little bit on Michigan and then we had special guys going out and securing franchises. But deep in our hearts we would go anywhere in the United States, it didn't make any difference, because we found great similarity in operating one cable system as compared to another.
SOUTHWICK: And there was no preference in terms of buying an existing system or franchising and building a new one?
ROBERTS: It was cheaper to franchise and get the franchise and to start from scratch than to buy, but we did everything. We bought, we built, we did anything anyway we could make some progress.
SOUTHWICK: And how big was the company, roughly, in the early '70s? Can you give some sense of what the growth was, and was that a difficult process for you, growing quickly?
ROBERTS: No, we kept doubling our size, it seemed to me, as we moved along, but it was not difficult because I think Dan Aaron, who managed our businesses for a long time was a very capable administrator and he was able to set the company up from an operational point of view that was very dependable and I give him credit for having helped us create the cable systems that we did have, and I give Julian credit for figuring out a good financial way to finance them. The only thing we did wrong was we gave away a lot of equity along the road.
SOUTHWICK: Really? In terms of the stock?
ROBERTS: All of our employees got stock and we very early on spread the wealth around. Now the disadvantage is that the smarter guys who didn't do that so quickly ended up with a lot more money than I have, but we have a very nice business and I go to sleep every night and have no problems.
SOUTHWICK: As HBO came online it became possible for the cable operators to enter the big cities. What was Comcast's strategy there and what was your theory on how...?
ROBERTS: Well, there were franchises that we had even gotten that we had reception of three good channels and maybe another one that we didn't think would buy any more television, buy cable television. As soon as the satellite came on we started to go after the big cities, Philadelphia, Trenton, cities that were near by but that were major markets, and that meant a great spurt for the cable industry. I think it was 1972.
SOUTHWICK: And that was a highly competitive operation, the different cable operators bidding against each other.
ROBERTS: Well, we were bidding against each other, there is no question about that, and I think we did as well as anybody else did.
SOUTHWICK: Did some of the companies over promise in terms of what they could deliver?
ROBERTS: We believe we did not in our applications. I think we stuck pretty close to what we promised and it was not like Warner that had the hired troop. Lewis had to go out and withdraw the promises they had made, but they got the big city franchises and Drew Lewis got everybody to agree to take less.
SOUTHWICK: Or he sold them off to TCI or other companies.
ROBERTS: Something like that. Very smart fellow. He was on our board for awhile.
SOUTHWICK: It seems to me, looking at the history of Comcast that the Storer and then Westinghouse episodes were the ones that really boosted you into the ranks of the big companies. Can you tell me a little bit about how those came about?
ROBERTS: Well, Westinghouse, if I remember correctly, we decided that we would like to go after their properties when they announced they were going to sell them, and I think I got a call from Time Warner that said, "How'd you like to be our partner, and we said, "Swell." And then we got a call from, I'm not sure whether it was TCI or..., that said, "Would you like to be our partner," and we said, "We just decided we'd partner with Time Warner, but I'll ask them if they want to go three ways." They said, "Fine." And we went three ways.
SOUTHWICK: And why were you an attractive partner? You weren't the biggest.
ROBERTS: No, I think we were the easiest to get along with.
SOUTHWICK: In a fairly contentious group.
SOUTHWICK: And that took you to another level then, in terms of size.
ROBERTS: Yeah, by the way, Julian has the best memory of anybody and if I've made some statements that aren't correct, Julian will be able to correct them.
SOUTHWICK: Very good. Well, he's gone through this process.
ROBERTS: You can leave out my mistakes.
SOUTHWICK: Very good. And you'll have a chance to look at the transcript of this and change it if you'd like.
SOUTHWICK: Was there a process in terms of educating Wall Street? You had common stock, it was traded, was there a process in terms of educating Wall Street about how this business worked? Were they receptive to cable in terms of the companies that made recommendations on what stock to buy, the analysts and so forth?
ROBERTS: Our experience with Wall Street has been very good. We never over-forecast and our idea was to come under in our forecasts as opposed to what we would actually do. So they could learn to believe what we said rather than having a lot of puffing. So I think we did very well with Wall Street, and they understood that this business was recurring monthly income and once you make a capital investment, and it's very expensive to get into the cable business, so you have quite a barrier to entry, but once you're there you have this recurring monthly income. Now there are overbuilders for cable and they're comparing their costs to what somebody else is paying for a subscriber and it appears that they can build it cheaper than paying the current growing rate. And the difference is, of course, their cost of construction is greater than ours has been. Most of ours is written off even though we've upgraded the systems and we think they're going to have some problems. But again, these people are being financed by Wall Street private money, not the public money, and we'll have to see. I don't think that the cable business is going to be too badly hurt because our mentality has changed. We're now very competitive. We're anxious to hold on to what we've got and expand it if possible, find new products. And what it did is it revitalized the companies, I think. I now our company is filled with these young guys who have got bushy tails and want to go racing out after a million things and it looks like a lot of what's out there is going to work. So I think the business is more exciting today than it was then.
SOUTHWICK: That's great. As the company moved into the big cities and grew and grew, did it experience customer service problems or image problems with the customers, and how did you address that in contrast?
ROBERTS: We made a big effort. Of course my advertising background is such that you should be good to your customers, so we have always tried to give the customers more than a fair break, and to answer the telephone as rapidly as possible, and to do all the other things that you want to do to make the customer feel wanted. I'm sure other cable operators must have had the same attitude, but there's no question that if you have something that people think is the only game in town, you're people, whether you like it or not, sometimes are a little huffy when they shouldn't be.
SOUTHWICK: And maybe encourage to be so by some of your competitors? The broadcasters and telephone companies?
ROBERTS: Well, we've never had friendly broadcasters, so you have to assume they're not going to speak too well of us, but in reality, you've got millions of people in one generation suddenly moved to a different kind of entertainment and you're bound to have some slips along the way, but I think generally people recognize that the closer you get to the customer the better off you are.
SOUTHWICK: And during this period you also raised five children.
ROBERTS: Oh, yes.
SOUTHWICK: And if you like, we'd love to have you tell us a little bit about each of them, particularly one who ended up here.
ROBERTS: Well, my wife is an actress, and she's had many theatrical experiences while she had five children. It's amazing. When I would get home at night, the big deal was the dinner table and everybody talked about what they did, and I think we encouraged our kids to do that, which gives you the greatest happiness and don't worry what anybody says about it. If you want to be a hotdog salesman, sell hotdogs. It doesn't make any difference as long as you enjoy it, because most people, I used to say, hate their jobs. They wish they were doing something else, and that's a very unhappy kind of a situation to find yourself in. So do what you think you'd like to do, and they all ended up exactly that way. The oldest is a girl, she was a Phi Beta Kappa at Penn. She got a Master's in City Planning at Penn, went to Harvard and got a Master's in Public Health, and then went on to Tufts Medical School, where she was in the public health department, and she loved it. One day, she was on a tennis court in Boston and she met a guy with an English accent who was very charming and he worked for one of the local banks. Anyway, she married him, they came back to Philadelphia, they bought a newspaper, a weekly newspaper, and they're both very happy with the newspaper in their lives. Unfortunately they don't have any children, which is a medical problem that they have. The second child is also a girl. She went to Penn Fine Arts department, went on and became an architect at the University of Washington in St. Louis. After she was working in an architect's office for some time she called me up one day and said, "Daddy, can I come home?" She'd been in Boston. I said, "Yes." She said, "You know, I really don't want to be an architect." I said, "After all these years that you spent?" Every summer they went to Mexico for low cost housing and they spent so much time. She said, "I want to be a graphic designer." And today she's a graphic designer and she had her own business and she's quite successful. The third child is a son. He just got tenure at the University of Denver. He's a research developmental psychologist. At the moment he's already studying the brain. He'd gotten a $250,000 grant from the National Science Foundation and a $15,000 grant from NASA, so he's really doing very nicely. He has one child, two pairs of corduroy pants, two shirts, and some sneakers, and a great heart. And he's a perfect skier, he's an A-1 skier living in Denver. The fourth child is Brian, and Brian is very unique in that he made up his mind what he wanted to be when he was almost in junior high school to senior high school. He wanted to be in the same business I was in. And he would come out to the office and sit around; he couldn't get enough of it. It's amazing!
SOUTHWICK: As a young boy?
ROBERTS: As a young boy! And he wanted to know about the cable business and what business we were doing. When he got out of college where he had been a finance major.
SOUTHWICK: He was also at Penn?
ROBERTS: Also at Penn, the Wharton School, he also was co-captain of the squash team and he was a BMOC in those days, Big Man on Campus, very popular, and he would play squash all week and be in a tournament on the weekends, and when he wasn't playing squash he was bugging me: "What's happening today? What did you do? What are you going to do next?" And finally when it came time for him to look for... when he graduated, he came in and said, "I'd like to go to work. When do I start?" I said, "Brian, go get yourself a job somewhere else. Take at least two years, you can bring us back some other thinking this way, or be brainwashed by what's going on." He refused to go for an interview. The Wharton School puts out a book on every student and they go through Wall Street. He got requests from the investment bankers, from insurance companies, some other people, "Come in, let's meet you." Playing squash is a big item on Wall Street, by the way. So, he refused to go, and the story is – a true story – he came to me one day and he says, "You don't want me to work here because you're rejecting me." I said, "I'm not rejecting you, Brian, you can start tomorrow." And he did start. But I said, "One thing, you're going to have to start at the very bottom because you don't want people to say you got your job because of your father." He said, "I don't care where you send me or what you tell me to do, I'll do it." So he started, he had one summer where he climbed the poles in Westmoreland, Pennsylvania and he made installations in the house and he lived out there by himself. Then the next job, we sent him to Michigan and he was there all by himself, and he went through whatever agonies you go through in Michigan when there's a strike of the automobile workers. And after that, I think he went to Trenton as an assistant and then finally became a manager, then a group manager, so he really went through the whole business. I'd never ran a cable system in my whole life, but Brian knows more about running a cable system than anybody in the whole company because he's been through every one of them. By the way, during this time he also went and sold Muzak because that was our other business. We were the largest Muzak operator in the United States.
SOUTHWICK: Oh, really? That goes back to your relationship with Muzak in the '50s.
ROBERTS: Yes, I didn't burn any bridges with Muzak when I left there, and my brother, who unfortunately passed away in 1972, had been the advertising director at Revlon and had a similar career to mine. He was also in advertising and marketing, and Muzak Corporation, after I had left for some time, invited him to come over to be a senior vice-president of the company, and one day he came in to me and he said, "You know, Ralph, we ought to buy some of these franchises. They're a license to steal as recurring monthly income." That was our favorite expression, just like cable. You put in the equipment and every month they send you money. So we bought 13 or 14 Muzak franchises across the United States and my brother Joe ran those franchises. Eventually we sold them, but at that time, Brian had to learn the Muzak business too.
SOUTHWICK: So he was selling Muzak to companies that put them in buildings?
ROBERTS: Yes, it was business to business, as they would say in the internet language today. So, to continue with Brian, he then moved into the financial end. I think he spent a summer living with Julian and working in a computer company in New Jersey. So if anybody was trained with blinders on like this... He sees nothing but the business. Brian has got a one track mind, at this point, on how to make the business better and he's very ingenious in his development and he's a very good negotiator. He has lots of street smarts and he's an honest, decent person at the same time.
SOUTHWICK: How and when did the two of you come to the decision that he should become CEO?
ROBERTS: As early as possible. I thought that if I was knocked off for some reason and I didn't make that arrangement, it would be "Well, he died and Brian got the job." So I thought it ought to be while I'm still here. Most entrepreneurial type people have difficulty in transferring full responsibility to their children, and in my case – our offices our adjacent to each other – and in my case I thought that that's the right way to do it. I think he was 30 years old, or maybe 31, when he was made president of the company, and nobody was going to question that because I was standing right there. People would ask me a question about something and I'd say, "Why don't you check with Brian. I really don't know."
SOUTHWICK: Great feeling, I would think.
ROBERTS: Eventually it sunk in that he was going to be the guy, and I think everybody respected him for the way he got there and I think they figured it was nice of me to get the hell out of the way.
SOUTHWICK: Can you talk a little bit about the relationship between the cable industry and the regulatory bodies, particular the Washington angle. Were you involved in lobbying congress over the years, for example, and meeting with the FCC?
ROBERTS: Yeah, I don't remember specifically who was who.
SOUTHWICK: Right, but just in general, did they understand each other? How does that relationship work? It's been up and down – I mean, sometimes they want to bash you and sometimes they've wanted to help you over the years.
ROBERTS: I think a lot has to do with the lobbying that's done by the television industry of networks and the cable people. We've always felt we were the underdog, that the networks were bigger and stronger and had many, many years on us in developing relationships, as did the telephone company. The cable people were kind of "Johnny come latelys" as far as going into the political arena. We never had to worry about Washington when it was a local situation, we had local rules and everybody seemed very contented. Along came the big pressure when the stronger the cable people got the more opposition there was and the more lobbying in Congress, and I think we never did as good a job as the telephone company, and that's really because of lack of knowledge and experience in how to go about it. But we continued to grow and we got better and better at what we were doing, and eventually we got to know the FCC chairman and all the people and they came visiting our conventions and learned more about the cable industry. So that I think they then became more understanding of what we were trying to do. I think today the FCC does know all about the cable industry and the fact that there's so much consolidation going on is probably the only place that you can say there might be a negative as far as cable people are concerned. Today it's hard to find somebody who is just a cable operator because they've been absorbed by other larger corporations.
SOUTHWICK: You must have had a lot of offers over the years to buy Comcast, and many of your colleagues in the business, people like Alan Gerry and so forth, at some point, took those offers. Why did you decide to stay in the business without selling out?
ROBERTS: I've always believed that it's better to have a business than just money because having just money has a lot of limitations. There are a lot of people around with nothing but money, and either they don't know what to do with their lives or they're just there, but having a business takes years and years to create and develop and if you don't have to sell it, why sell it? Why not enjoy all the fruits that come from being stimulated from whatever activity that you can participate in? So I've always told Brian, I said, "If it were me, I'd rather have the business than a few extra dollars."
SOUTHWICK: Interesting. You mentioned Ted Turner earlier, and I was wondering if you could recall the first time you met him, perhaps, or some of the...
ROBERTS: I think Ted Turner is one of the greatest creations we've got. He's remarkable. I remember him coming into my office one day, a very small office, and his getting down on his hands and knees and salaaming to me and saying, every time he went up and down, "You hate me. You hate me. You hate me. Why do you hate me?" So I said, "For Christ's sake Ted, get off the floor. What makes you think I hate you?" "Because you don't carry my channel on every one of your cable systems. You don't carry it here and you don't carry it there, and if you don't carry it that means you hate me." That was Ted Turner. Recently, Ted Turner received the Liberty Medal from the city of Philadelphia, and before the ceremony we were in a room having coffee and Ted comes over to me and he says, "Will you be my pallbearer? I'll be your pallbearer." I said, "What the hell makes you think of that?" "Oh, I'm just getting things lined up, I want to know if you'll be my pallbearer." Then he gets up to receive the Liberty Medal before thousands of people, and it's a network program, and he says, "Well, I really don't deserve this medal. This medal should go to all my people that work in our company that have done it, and it should go to the cable people. If it hadn't been for them, I'd never have anything, and there's one of them sitting out there right now – Ralph Roberts – he's a fine fellow and he supported me." So, Ted Turner is quite a character but he's got a heart of gold and he really believes what he says. I think he's terrific.
SOUTHWICK: What were your relationships early on with Jerry Levin and HBO? Did he come and call on you to try to get you to carry HBO?
ROBERTS: Well, in the early days of Jerry Levin, Dan Aaron was the guy who made most of the contact and Jerry was always an extraordinarily smart fellow and he was a great credit to the industry and he handled himself very well. So I only can think of good things about Jerry.
SOUTHWICK: Let me ask you a little bit about, if you can kind of look forward, you've got a lot of competition from direct broadcast satellites, from overbuilders, from all corners of the universe, and yet it seems the cable industry also has lots of new opportunities for new kinds of businesses – high-speed data, which is going forward quickly, and digital, and stuff like that – how do you see things developing over the next ten years, if you can look that far forward?
ROBERTS: Well, it's an old cliché when you say necessity is the mother of invention. Cable people have to develop new services because you're going to lose business to the satellite or to overbuilders you've got to replace it with something, and so therefore I think we're challenged to find new products. A good example is digital – we've sold hundreds and hundreds of thousands of digital subscribers at $9.95 each, all brand new money. And I think that's an example of getting something that fits in with the operation that you can sell and will create new revenues, so I think it's a necessity for us to do this and develop it, and when you have enough guys thinking about it you're going to come up with some good products.
SOUTHWICK: It seems to me looking at the cable industry that we have managed falling into the trap that the broadcast networks were in for awhile where the world would never change and that they would always dominate and everything would stay the same. How do you kind of keep an entrepreneurial outlook when you've gotten so big? Is that a challenge?
ROBERTS: Well, it all depends on how you stimulate the folks around you, and I'm considered the bull in the china shop here. I'm always willing to go ahead and take a chance and get something else. Surprising, but I figure that I'm more conservative in other areas so I can afford to be a little more liberal here, but we've gone into many businesses – we've gone into QVC, which is a tremendous business, we did buy the sport teams here in the Philadelphia area and the stadiums contained therein, and we're willing to go into other businesses. We just started Julian off in a venture capital fund. It has nothing to do with cable, it so happens, but it's there, it's to be taken if you just reach out for it. That's called opportunism, and I think that our mentality is such we're willing to take the risk. Now, that's a very hard spirit to keep going as the company becomes larger and more bureaucratic, and one of the things I think we've tried to do here is by example, is to keep it a family affair and we have a university we call Comcast University, where we bring in the people, many of whom we've never met because they were either with Jones's systems or with some other systems that we acquired and we want to get to know them and we want them to get to know us, and we're very loosy-goosy about talking to people and telling them the door is always open. One of my fun things is talking to a crowd of our people and saying, "By the way, if somebody's not treating you right, call me up about it. Here's my telephone number."
SOUTHWICK: And do people?
ROBERTS: Once in a while. But they love it, knowing that you really are interested and people like what they're doing. Same thing I told my kids – if you don't like your job, it's a shame. You ought to change your job or improve it, or do something. To spend your life with something you don't like is not so good.
SOUTHWICK: I know you've been involved very much in Philadelphia and with the University of Pennsylvania, can you talk a little bit about your thoughts in terms of the philanthropic duties or involvement with community that somebody who is a successful businessman ought to pursue?
ROBERTS: Well, I have a foundation that I put a lot of stock in that I had in the company, and that foundation gives away the maximum amount of money every year. We also have a foundation for the corporation and we divide the money up with all the managers and tell them that they should use that money for their communities and to try to find a way to help out other people and make it known that they're willing to do that. At one point in time, we were the largest giver, I think, for United Way in that we provided doughnuts, cable commercial doughnuts, to our managers where the guy in the middle could say, "And my name is John Jones, I'm the manager of the cable system. Today we salute the Boy Scouts and we're giving five scholarships to them today." Then he comes back, "This is part of the United Way Program," for so and so, and so and so, and I think – they told us at least – that we contributed more than anybody else through that device and so I think that cable people are very responsive to their communities, and if you look at, I think you take any cable system, they make contributions and do things for the community so that people get to know them. So I think cable is a very generous, at least I suspect they are, same as we are, as a contributor to the good of the community.
SOUTHWICK: Terrific. Well, thank you for taking the time to visit with us today.
ROBERTS: A pleasure to talk to you.
SOUTHWICK: I think anybody listening to the history of your life would say, "Next time around I'd like to be Ralph Roberts."
ROBERTS: Well, I don't know about that.
SOUTHWICK: A marvelous family and a great success in a career, you can't ask for much more than that.
ROBERTS: Well, I can tell you, I haven't got anything to complain about from that point.