Comcast CEO: Pandemic, Racial Tension Challenge Society "Like Never Before"

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Comcast chairman and CEO Brian Roberts

Brian Roberts also discussed the slow reopening of theme parks and production businesses and touted continued broadband momentum.

On Wednesday, Comcast chairman and CEO Brian Roberts discussed the company's impact from, and reaction to, the novel coronavirus pandemic and social upheaval following the May 25 death of George Floyd.

Opening the company's virtual annual shareholder meeting, which was webcast, he acknowledged the "extraordinary time we are living in," saying: "Our society has been challenged like never before." And he added: "On behalf of all of us at Comcast, our hearts go out to everyone who has been impacted by COVID-19 and the events associated with the senseless killing of George Floyd." 

He also vowed Comcast would look to play a "constructive role" amid the debate about social and racial divides and launch initiatives in the weeks, months and years ahead to help address them. He didn't share details on those, but mentioned the firm's push in recent years to bring affordable internet services to underserved areas. Roberts concluded that the challenge was "to reimagine all forms of our society and our corporate practices."

A shareholder question criticized MSNBC's coverage of the recent protests and racial conflict in America. "It is truly heart-breaking and tragic that in 2020 we find our society still struggling with issues that are so core to human dignity. Racism, injustice, violence have no place and can not be tolerated," Roberts replied. "The news coverage, a risk of personal harm and injury and in some cases loss of life for journalists … continues to be one of the most important parts of NBC News." He added: "By and large, I think the coverage continues to inform and educate our society.”

When a shareholder suggested that MSNBC anchor Ali Velshi and others in short video clips seemed to defend violence or extremism, Roberts said he was not familiar with any such clip. In late May, Velshi himself responded on Twitter to criticism of a short clip in which he was shown describing the situation in Minneapolis while a fire was burning in the background. "I think it would be best if you heard the whole clip, not the 12-second version, in which I describe, having covered the story for hours, that ... notwithstanding the fire behind me, most protestors were not involved in looting and burning property down," he explained.

Turning to the pandemic, Roberts said it has created "a tremendous amount of uncertainty and financial strain" for companies and people around the globe and caused "substantial duress" in the firm's theme parks and TV and film production businesses. On the other hand, Comcast's broadband has seen "continued momentum through today," he added.

He later added that executives were "optimistic that there is going to be a thoughtful and gradual return” for the company's businesses closed and impacted by the virus, but also warned that "we will continue to feel the impact of this crisis significantly in the current quarter and quarters ahead." 

During the meeting, Roberts reiterated that European pay TV giant Sky has been "very affected” by sports cancellations and delays, but the return of soccer in Germany and soon in the U.K., plus "hopefully" in Italy as well, "will have a tremendously positive impact for Sky."

At the end of April, Comcast reported its first-quarter financials that included an early impact from the novel coronavirus pandemic on entertainment arm NBCUniversal's TV advertising and theme parks business. But bigger financial fallout is expected for the current second quarter. 

"Our Cable Communications results, while strong in the first quarter 2020, will be negatively affected in the second quarter by the significant deterioration in domestic economic conditions in recent weeks and by the costs associated with our support of customer connectivity as the population increasingly works and learns remotely from home," Comcast said when it reported its latest results. "NBCUniversal and Sky results also will be negatively impacted to a greater extent in the second quarter 2020. As a result, we expect the impacts of COVID-19 to increase in significance in the second quarter 2020 and to have a material adverse impact on our consolidated results of operations over the near-to-medium term."

Millions of Comcast subscribers sheltering at home amid the pandemic gained access in mid-April to a preview of NBCUniversal's Peacock streaming service, which will make its nationwide debut in July. The ad-supported Peacock is available at no cost to Comcast X1 and Flex customers, offering a mix of current programming, library titles, including 30 Rock, Parks and Recreation and Saturday Night Live, and early access to late night shows from Jimmy Fallon and Seth Meyers. It also features Universal’s film library, from the Jurassic Park franchise to Schindler’s List.

Asked about Peacock, Roberts said Wednesday it was "very early days," but his team was "very excited” about the response so far.

Comcast Cable CEO David Watson, who oversees the media and technology giant's traditional cable TV operations, previously shared that he and his wife tested positive for the novel coronavirus. NBCUniversal CEO Jeff Shell was also hit by the virus. 

At the end of April, Shell had addressed the industry debate about Universal Pictures' decision — which Roberts mentioned Wednesday in his prepared remarks — to break the theatrical window for Trolls World Tour amid the pandemic via a premium VOD release, telling analysts that a majority of movies are currently being consumed at home, whether people like that or not, and it was "not realistic" to expect that to change right now. He said, though, that he expects theatrical would "some day again … be the central element to our business," adding that that "is how people make their movies and how they expect the movies to be seen."

The Trolls sequel was "ready to go," and the company had worked on it hard and spent a lot of money on it, and consumers “desperately needed” a family and kids offer, he said. The idea behind the digital offer was to "preserve the premium nature of movies," Shell added, concluding: "I would expect that consumers are going to return to the theaters," and premium VOD "will be part" of the film business as a "complementary" offer, "not a replacement."

During Wednesday's meeting, Roberts also answered questions on such topics as discounts for seniors, customer service, plans to add more young board members, and his pay ratio of 461:1 compared with the median Comcast employee pay. Comcast's board looks at "all the compensation metrics" at the firm and across the broader industry, the chairman and CEO replied. 

Asked why the company didn't support a shareholder proposal for an independent chairman, which didn't get a chance to pass as no sponsor was available to present it at the meeting, Roberts said the "existing structure has served our company extremely well," and "we have a very independent board." The Roberts family controls Comcast via a class of stock with more voting power. Mentioning that the board now considers its independent members accounting for 90 percent, he concluded: "I think there is tremendous independence."

A shareholder proposal that was defeated on Wednesday — as is typically the case at companies where families have outsize voting power — especially because Comcast opposed it, called for an outside investigation of sexual harassment issues at NBCUniversal and cited, among other things, the firing of Today host Matt Lauer. Comcast said the proposal called for an "independent investigation and report on risks posed by failing to prevent sexual harassment."