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Note 14: Commitments and Contingencies
Commitments
Our programming networks have entered into license agreements
for programs and sporting events that are available for telecast.
In addition, we, through Comcast Spectacor, have employment
agreements with both players and coaches of our professional
sports teams. Certain of these employment agreements, which
provide for payments that are guaranteed regardless of employee
injury or termination, are covered by disability insurance if certain
conditions are met.
Certain of our subsidiaries support debt compliance with respect
to obligations of certain cable television partnerships and invest-
ments in which we hold an ownership interest (see Note 6). The
obligations expire between May 2008 and March 2011. Although
there can be no assurance, we believe that we will not be required
to meet our obligations under such commitments. The total no-
tional amount of our commitments was $965 million as of De-
cember 31, 2007, at which time there were no quoted market
prices for similar agreements.
The following table summarizes our minimum annual commitments
under programming license agreements of our programming net-
works and our minimum annual rental commitments for office
space, equipment and transponder service agreements under non-
cancelable operating leases:
December 31, 2007 (in millions)
Program
License
Agreements
Operating
Leases
2008 $ 473 $ 323
2009 $ 486 $ 287
2010 $ 499 $ 234
2011 $ 484 $ 184
2012 $ 399 $ 153
Thereafter $ 3,977 $ 835
The following table summarizes our rental expense and program-
ming license expense charged to operations:
Year ended December 31 (in millions) 2007 2006 2005
Rental expense $ 358 $ 273 $ 212
Programming license expense $ 484 $ 350 $ 244
Contingencies
We and the minority owner group in Comcast Spectacor each
have the right to initiate an exit process under which the fair mar-
ket value of Comcast Spectacor would be determined by ap-
praisal. Following such determination, we would have the option to
acquire the 24.3% interest in Comcast Spectacor owned by the
minority owner group based on the appraised fair market value. In
the event we do not exercise this option, we and the minority
owner group would then be required to use our best efforts to sell
Comcast Spectacor. This exit process includes the minority owner
group’s interest in Comcast SportsNet (Philadelphia).
A minority owner of G4 is entitled to trigger an exit process whereby
on May 10, 2009 (the fifth anniversary of the closing date), and on
each successive anniversary of the closing date or the occurrence of
certain other defined events, G4 would be required to purchase the
minority owner’s 15% interest at fair market value (as determined by
an appraisal process). The minority owners in certain of our tech-
nology development ventures also have rights to trigger an exit
process after a certain period of time based on the fair value of the
entities at the time the exit process is triggered.
At Home Cases
Litigation had been filed against us as a result of our alleged con-
duct with respect to our investment in and distribution relationship
with At Home Corporation (“At Home”). At Home was a provider
of high-speed Internet services that filed for bankruptcy protection
in September 2001. Filed actions were: (i) class action lawsuits
against us, AT&T (the former controlling shareholder of At Home
and also a former distributor of the At Home service) and others in
the United States District Court for the Southern District of New
York, alleging securities law violations and common law fraud in
connection with disclosures made by At Home in 2001, and (ii) a
lawsuit brought in the United States District Court for the District of
Delaware in the name of At Home by certain At Home bondhold-
ers against us, Brian L. Roberts (our Chairman and Chief Executive
Officer and a director), Cox (Cox is also an investor in At Home
and a former distributor of the At Home service) and others, alleg-
ing breaches of fiduciary duty relating to March 2000 agreements
(which, among other things, revised the distributor relationships)
and seeking recovery of alleged short-swing profits under Sec-
tion 16(b) of the Securities Exchange Act of 1934 (purported to
have arisen in connection with certain transactions relating to At
Home stock effected under the March 2000 agreements).
65 Comcast 2007 Annual Report on Form 10-K