Comcast gets by on public assistance thanks to Pennsylvania taxpayers
You're more generous than you give yourself credit for.
Case in point: When Comcast recently decided it needed to build a $1.2 billion skyscraper in Philadelphia, you immediately sought out the CEO of the world's largest cable company for a heart-to-heart.
“That's an awfully expensive project,” you told Comcast's Brian Roberts. “You shouldn't shoulder the entire cost. Why don't you let me pick up part of the tab?”
Despite Roberts' half-hearted protests that he couldn't possibly let you do that, he ultimately accepted your $30 million check.
You also paid for his coffee.
If you don't recall that conversation, that's because it actually occurred between Roberts and your proxy, Gov. Tom Corbett, who is providing $30 million in state aid for the project. The city of Philadelphia is kicking in another $10 million.
It's easy to see why Comcast needs the assistance. Roberts' remarks in the company's most recent annual report for 2012 strongly implied that Comcast is on shaky financial footing. “Comcast had a very successful year with strong financial results,” he wrote in a letter to shareholders.
How strong? Try increases in consolidated revenue and operating cash flow, which grew to $62.6 billion and $20 billion, respectively. The company's free cash flow rose 13 percent to $7.9 billion. Comcast returned $4.6 billion to shareholders and increased its dividend by 20 percent.
No wonder Comcast needed your money.
“The (state) grants have nothing to do with the building itself,” John Demming, the company's executive director of corporate communications, said on Friday. “It's related directly to public infrastructure improvements — street widening, sidewalk improvements, expansion of a public concourse, a direct connect to (a nearby subway) station.”
The improvements wouldn't be imminent if the skyscraper wasn't being built, so the state funds do indeed have something to do with the building. Why doesn't Comcast pay for the upgrades?
“They're public improvements,” Demming repeatedly insisted.
Demming forecast the project would generate 20,000 construction jobs and 4,000 permanent jobs and provide an additional $31 million in state taxes. Those projections come from an economic impact study performed by a consultant hired by — you guessed it — Comcast.
If the Comcast handout seems hauntingly familiar, it should. When Comcast decided to build its new headquarters in Philadelphia in 2005, it approached then-Gov. Ed Rendell about contributing to the cause.
Just $43 million in state assistance later, the Comcast Center opened. Given its advanced age, the 6-year-old building probably will look shabby when the new Comcast Innovation and Technology Center rises next to it.
That's OK. If Comcast needs to replace the relatively dilapidated structure, Roberts and company know where to find investors.
If you're a Pennsylvania taxpayer, you're not just more generous than you give yourself credit for.
You're generous to a fault.
Eric Heyl is a staff writer for Trib Total Media. He can be reached at 412-320-7857.
