Comcast blames loan issues on partner
US Cable Group of Montvale, N.J., is in default on $33 million to the Bank of New York
Is the nation's largest cable-TV company paying all its bills on time?
Comcast Corp. and its hundreds of cable subsidiaries "are in compliance" with the loan and bond agreements that cover payments on the cable giant's $27 billion in debt, Comcast assured investors and the Securities and Exchange Commission in its annual financial report Friday.
But that same day, one of Comcast's major lenders, Bank of New York Co., told its own investors and the SEC in its yearly shareholders' proxy that a Comcast cable affiliate has "been in default" since Jan. 1 on loans totaling $33 million. The bank said it felt obligated to disclose the "problem loans" since Comcast's chief executive, Brian Roberts, is a Bank of New York director.
So is Comcast, which launched an unsolicited takeover bid for the Walt Disney Co. last month, in compliance, or in default?
The answer is wrapped in the corporate complexity of the cable-TV business.
The Philadelphia-based company is divided into more than 1,000 subsidiaries for its local cable, investment and other operating divisions.
It also inherited nine partnerships with other cable companies when it bought AT&T Corp.'s cable division two years ago, according to Federal Communications Commission records. While those customers are included in Comcast's total, their finances are, in some cases, reported separately.
It's not Comcast itself, but a Comcast partner -- US Cable Group of Montvale, N.J. -- that owes the $33 million to the Bank of New York, Comcast assistant treasurer Ken Mikalauskas said Tuesday.
Together, Comcast and US Cable own joint ventures that serve about 130,000 viewers, mostly in Southern states. The partnership is managed and 52 percent owned by US Cable. Comcast owns the rest as a passive, minority investor, the company says.
"We do not control this company. We obviously care what happens to it and want it to do well," Mikalauskas said. "But it's not our thing. . . ."
Officials at privately held US Cable were unavailable for comment Tuesday.
The Bank of New York expects it will eventually get paid. "The bank expects the borrower to sell assets and use the proceeds to repay a portion of the loans," after which "there would no longer be a default," according to the bank's proxy statement.
Meanwhile, the bank's board has decided its Comcast-related "problem loans" aren't big enough to endanger Comcast's general financial health and "would not jeopardize Mr. Roberts' judgments in behalf of the company."
If US Cable is unable to pay what it owes, Comcast could take over the jointly owned systems and assume the debt -- or walk away, Comcast officials said.
