• by Paul Gough , April 28, 2004

Ninety days after it surprised the media industry with a bid for the Walt Disney Co., Comcast Corp. took it off the table.

"It has become clear that there is no interest on the part of Disney's management and board in putting Comcast and Disney together," said Brian L. Roberts, Comcast's president and chief executive officer, at a briefing with reporters Wednesday morning.

The decision puts an end to what would have been a mega-merger in the media industry, combining the content powerhouse and signature brand that is Disney and the huge distribution presence of Comcast in cable and broadband Internet. It means that Disney will grope a solution for its woes, particularly at ABC, without help from a cash-stocked company like Comcast. And Comcast, which already owns a handful of content networks like E and TV One, will have to find other options if it wants to marry content and distribution.

Comcast's decision comes a day after Disney's board of directors gave a vote of confidence to embattled chief Michael Eisner, who after a stormy annual meeting last month seemed to reduce his powers by taking the chairman's job away from him. While Eisner isn't chairman - that job goes to presiding director George Mitchell - the board didn't take any operating responsibility away from Eisner.

>From the beginning of the takeover bid, it was clear that Eisner and other Disney executives wanted nothing to do with Comcast. Eisner rebuffed Roberts when the Comcast chief approached him about a merger with Disney; the takeover bid was made public a few days later, much to Eisner's annoyance, at an investors' conference at Walt Disney World. While Disney was put on the defensive immediately, it didn't take the board long to reject Comcast's offer out of hand. And Wall Street raised the bar as Disney's share price rose as Comcast's sank slightly, making it harder for Comcast to consummate the deal without raising its offer, something it declined to do.

So just before the market opened Wednesday, Comcast announced it wouldn't pursue a takeover. Then Roberts and Steve Burke, a former Disney executive who now runs cable operations for Comcast, met investors and then the press.

"We told you from the outset that we would be disciplined and we wouldn't bet against ourselves," Roberts said. He said that a deal for Disney would have required giving up more stock than Comcast was willing to offer, no matter who much sense the alliance would make.

"Quite simply, this does not make good, financial sense," Roberts said. "Being disciplined is knowing when to walk away. That time is now."

Roberts and Burke said that they had expected that Disney management would engage in discussions toward a friendly merger that would benefit both companies and their shareholders.

"Unfortunately, it has become abundantly clear that Disney does not share our interests," Roberts said.

While it's clear that Comcast put a lot of thought into the bid for Disney, Roberts said he was surprised that Disney executives wouldn't even discuss it.

"They've made it pretty clear that they're not interested in talking to us," said Burke, who used to work for the Magic Kingdom.

By contrast, Comcast reported a first quarter that was strong in both distribution and content. Roberts said that Comcast is "as strong as it's ever been" and would pursue opportunities as they came along.

"Whether that's content, distribution or technology, those are the three areas that we're looking at," he said.

He said that E Entertainment Networks and The Golf Channel are "performing great" and Comcast has high hopes for G4 with the pending purchase of TechTV, along with the new joint venture, TV One. Roberts said that Comcast had walked away from other opportunities, most notably possible mergers with Media One and Vivendi Universal.

"We view content as an opportunity. I think we've said all along, this [Disney] is a nice to have deal. AT&T Broadband was a must-have deal," Roberts said.