Comcast 2010 Annual Report Download - page 35

Table of Contents
29
Comcast 2010 Annual Report on Form 10-
K
seasons. collective bargaining agreement with the NBA’s
players’ union expires following the end of the 2010-2011
season. Our programming rights agreement with the NFL
requires us to make significant payments to the NFL, and, at
the NFL’s option, we may be required to make these
payments even if the NFL does not play all or part of a
season during the term of our agreement because of a player
strike or lockout. In the absence of a timely agreement,
protracted negotiations could result in a player strike or
lockout, in which case the number of NFL games that we
broadcast, and our revenue from those broadcasts, may be
reduced. Although the NFL would be required to credit or
refund the rights fee attributable to the lost games to us (in
addition to paying interest and out-of-pocket production
costs) if all or part of an NFL season is canceled, it would
have the right to apportion the credit or refund throughout the
remaining term of our agreement, potentially all in the final
year of the term. The timing of such payments and refunds
could have an impact on our cash flows during the relevant
period. In addition, any labor disputes that occur in any sports
league or association for which we have the rights to
broadcast live games or events may preclude us from airing
or otherwise distributing scheduled games or events, which
could adversely affect our business and results of operations.
We face risks arising from the outcome of various
litigation matters.
We are subject to various legal proceedings and claims,
including those referred to in “Legal Proceedings” and those
arising in the ordinary course of business, including
regulatory and administrative proceedings, claims and audits.
While we do not expect the final disposition of any of these
litigation matters will have a material effect on our financial
condition, an adverse outcome in one or more of these
matters could be material to our consolidated results of
operations and cash flows for any one period, and any
litigation resulting from any such legal proceedings could be
time-consuming, costly and injure our reputation. Further, no
assurance can be given that any adverse outcome would not
be material to our financial condition.
Acquisitions and other strategic transactions present
many risks, and we may not realize the financial and
strategic goals that were contemplated at the time of any
transaction, including the NBCUniversal transaction.
From time to time we make acquisitions and investments and
enter into other strategic transactions. In connection with
acquisitions and other strategic transactions, we may incur
unanticipated expenses, fail to realize anticipated benefits,
have difficulty incorporating the acquired businesses, disrupt
relationships with current and new employees, customers
and vendors, incur significant indebtedness, or have to delay
or not proceed with announced transactions. The occurrence
of any of the foregoing events could have a material adverse
effect on our business, results of operations, cash flows and
financial condition.
In particular, the NBCUniversal transaction involves the
integration of the Comcast Content Business with
NBCUniversal’s businesses, as well as the integration of
NBCUniversal’s businesses with our cable distribution and
other businesses. We, as well as NBCUniversal, will be
required to devote significant management attention and
resources to continue integrating these businesses.
Challenges involved in the integration include successfully
integrating each company’s operations, technologies and
content, and combining corporate cultures, maintaining
employee morale and retaining key employees. There can be
no assurance that we can successfully integrate these
businesses or succeed in the highly competitive media
industry. Moreover, there can be no assurance that
NBCUniversal will be able to generate strong cash flows or
favorable financial returns.
The loss of key management personnel or popular on-air
and creative talent could have a negative impact on our
business.
We rely on certain key management personnel in the
operation of our businesses. While we maintain long-term
and emergency transition plans for key management
personnel and believe we could either identify internal
candidates or attract outside candidates to fill any vacancy
created by the loss of any key management personnel, the
loss of one or more of our key management personnel could
have a negative impact on our business. In addition,
NBCUniversal’s businesses depend on the continued efforts,
abilities and expertise of its on-air and creative talent. If we
fail to retain our on-air or creative talent, if the costs to retain
such talent increase materially, if we need to make significant
termination payments, or if these individuals lose their current
appeal, our business could be adversely affected.
We face risks relating to doing business internationally
that could adversely affect our business.
Our operation of businesses worldwide increased
substantially as a result of the NBCUniversal transaction.
There are risks inherent in doing business internationally,
including economic volatility and the global economic
slowdown, currency exchange rate fluctuations and
inflationary pressures, the requirements of local laws and
customs relating to the publication and distribution of content
and the display and sale of advertising, import or export
restrictions and changes in trade regulations, difficulties in
developing, staffing and managing foreign operations, issues
related to occupational safety and adherence to diverse local
labor laws and regulations, potentially adverse tax
developments, political or social unrest, corruption and risks
related to government regulation. If these risks come to pass,
our business may be adversely affected.