News analysis: Effects of media merger would start with prestige

Philadelphia-based Comcast Corp.'s bid to take over Walt Disney Co. -- if successful -- could stimulate the city's failing economy and potentially bring thousands of jobs to Center City.

Last week, Comcast Chief Executive Officer Brian Roberts offered Disney $66 billion to merge with the cable company. The Disney board of directors refused the offer Monday in what many say is an attempt to attract higher bidders or to get a better offer from Comcast.

If Disney and Comcast are eventually combined, the merger would produce a "global heavyweight centered right here in Philadelphia," said Mark Schweiker, former Pennsylvania governor and president of the Greater Philadelphia Chamber of Commerce.

Many think it would have significant positive effects on the city's economy, and Schweiker estimated that it would produce several thousand jobs.

Wharton professor Harbir Singh, however, said that aside from having "a very large corporation located in the Philadelphia area, I'm not sure that there would be a substantial impact beyond that" on the city.

Additionally, he said that Disney might stick to the refusal it made yesterday, adding that Comcast's offer was only a first step.

"Comcast would have to counter with a higher bid" because Disney's stock has gone up in the last week, Singh said. "Disney could use this opportunity to revamp its senior management."

Still, City Commerce Director James Cuorato said he believes that it is likely that Disney will ultimately accept an offer from Comcast.

"I have to believe [Comcast] studied this every which way and concluded that they could do it -- otherwise, they wouldn't have gone down this path," he said.

Additionally, the merger would send a "very positive message ... to the business community around the world," Cuorato said. However, it's "too early to tell whether ... jobs would move here" if the companies merged.

"Initial indications are that Disney headquarters would remain in California, but that's not to say that it might not spur additional job growth here in certain areas," Cuorato said.

Still, "the potential upside is just tremendous," he added.

However, regardless of the success of the merger, Comcast seems to be in the midst of a large-scale expansion.

"The information we have is that Comcast is going to continue to grow whether the Disney acquisition goes through or not," Cuorato said.

"Comcast is proposing to move into [a yet-to-be-constructed building at] 17th [Street] and JFK" Boulevard, Cuorato said.

The announcement has ignited controversy in the city because Governor Ed Rendell has proposed offering 15 years of tax-free status to Comcast and other companies that would occupy the building.

Many object to giving a tax break to a company that large, Cuorato said.

However, "discussions about the tax-free property were going on long before that. Comcast is in growth mode with or without Disney," he said. "The value that they bring as one of the top corporations in the world ... is just a huge plus for the city."

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