BizFeed: Why Comcast Loves J.P. Morgan; Verizon to Buy AOL

Photo | Jeff Fusco

Welcome to BizFeed, the morning news memo from BizPhilly. Here, we’ll provide important news items to help you start your day. Let’s get to it.

1. Comcast Hires New CFO As Corporate Love-Affair with Investment Bankers Continues

The News: Comcast Corp. named Michael J. Cavanagh as its new CFO. He was formerly CFO of J.P. Morgan Chase (during its merger with Bank One) and also spent time at The Carlyle Group.

Why it Matters: The hiring seems to underscore the deep bonds between Comcast and J.P. Morgan, which advised the company on the NBC Universal deal and last August’s $2 million bond offering. The Wall Street Journal’s CFO Journal explains:

Mr. Cavanagh’s former employer, J.P. Morgan Chase & Co. has worked on $143 billion worth of mergers, debt transactions and equity offerings for the cable company since 2000, according to Dealogic. That’s the second-most work of all investment banks, second only to the  $144 billion Morgan Stanley has advised on during the same timeframe.

Comcast and other big company are turning more and more toward investment bankers to fill their own ranks. A separate Wall Street Journal story explains:

His move is yet another example of a high-profile executive jump from a financial services company to an entirely different industry.

In March, Google Inc. said Morgan Stanley CFO, Ruth Porat would become its next finance chief. And on Friday, Univision Communications Inc., the closely-held Spanish language broadcaster named former Goldman Sachs & Co. managing director, CFO. Anthony Noto also left Goldman last year to take the CFO seat at Twitter Inc.

The financial services sector has historically exported more talent across industry than other sectors. Of CFOs appointed outside their respective industry over the past five years, 27% came from financial services industry, according to Korn/Ferry International’s database of 1,000 large public and private companies.

Those with an investment banking background make attractive CFO candidates because they are highly skilled on how to deploy capital to generate greater shareholder return, “a skill that transcends industry,” said Bryan Proctor, head of Korn/Ferry’s CFO practice.

2. PHL Airport Aims to Fill 600 Job Openings Today

The News: Curious about which local companies are hiring? Look no further than the airport. In fact, 38 companies, including Delta Air Lines, Chickie’s and Pete’s, Avis, and the Philadelphia Police Dept. are hoping to fill 600 job openings at a job fair today. Positions include customer service representatives, sales associates, bartenders, and even massage therapists.

Why it Matters: At last year’s airport job fair, 250 people were hired, according to the Philadelphia Inquirer. Filling 600 new positions this year would represent a 140 percent increase. It’s likely a product of the airport adding more flights over the course of the year — like Delta’s nonstop service to London Heathrow or Spirit Airlines new nonstop flights to Chicago. The airport’s plans for expansion don’t hurt either.

3. Verizon to Buy AOL for $4.4 billion

The News: This morning, Verizon announced plans to purchase AOL. The deal that would create a heavy hitter in the online mobile video market. It also gives Verizon ownership of media companies like the Huffington Post, TechCrunch and Engadget.

Why it Matters: Doesn’t it feel like an eternity since AOL was a dominant player in the computing world? Remember getting an AOL disk in the mail, waiting for the dial-up to finally connect and then chatting for hours on Instant Messenger? (Did I just age myself?)

But AOL has been reinventing itself in recent years, especially in the online video marketplace. In fact, it generated $2.5 billion in revenues in 2014, a 9 percent jump from the previous year, according to the Wall Street Journal. Here’s more:

Verizon has said it plans to launch a video service focused on mobile devices this summer. The company has offered few details, but last month Chief Financial Officer Fran Shammo said the service will offer a mix of paid, free and ad-supported content and won’t try to replicate traditional TV.

The service will feature shorter snippets rather than 30 or 60 minute shows. It also could include multicast programming—a sort of broadcast service that uses cellular airwaves—for delivering live content like sports and concerts, along with on-demand viewing.

Business Insider says:

AOL shareholders have more than doubled their investment value (~150%) during AOL’s turnaround, and now Verizon and AOL will double the size of the mobile video/TV ad market.

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