What if Kerry Wins?

George W. Bush shouldn't be the only one concerned about John Kerry's White House run. Comcast CEO Brian Roberts should be worried, too. A Democratic takeover of the White House could mess up his $66 billion bid to buy Disney.

If Disney shareholders take Roberts up on his offer, approval by the Republican-led FCC is a done deal. Agency Chairman Michael Powell is widely expected to support the merger, albeit with possible conditions limiting the merged company's power to extort onerous prices from pay-TV rivals for ESPN or ABC O&Os. But it's almost certain the merger won't go to a commission vote until after January's inauguration.

Since the next president will pick the FCC chairman, a Kerry victory could put a merger-hostile Democrat in charge of Disney's fate. If Bush wins, he'll either ask Powell to stay on or tap one of other two sitting Republicans. Whoever it is will move the deal along, following a script worked out by Powell aides this summer and fall. However, nobody expects a Kerry pick to stick with Powell's plan.

"If Sen. Kerry is elected, the merger becomes more complicated," says Schwab Capital Markets analyst Paul Gallant. "Particularly if a Kerry-appointed commission arrived and wanted to take a fresh look." Comcast officials won't speculate on how a potential Kerry victory would impact their merger.

The person expected to ascend to the FCC helm if the Massachusetts senator should win is Commissioner Michael Copps, the most senior of the panel's two Democrats. Copps's office wouldn't talk about the merger, but he opposed the News Corp./DirecTV merger, which is Powell's blueprint for reviewing a Comcast/Disney deal.

"This decision is the wrong decision—wrong for the media industry, wrong for consumers, wrong for democracy in America," Copps lamented when the News Corp. acquisition was approved.

Although he would have little legal standing to reject the merger, Copps could cause a long delay as chairman. He could order staffers to rewrite Powell's draft and would undoubtedly tack on much tougher conditions.

"A Democratic FCC would be much more likely to force Comcast to address issues that don't have anything to do with the merger," predicts Legg Mason analyst Blair Levin. For instance, the debate over imposing open-access requirements on cable systems might be revived, forcing Comcast to carry competing Internet service providers on its broadband network. (Kerry opposed Powell's broadcast-ownership deregulation last spring and called for open-access conditions on the AOL-Time Warner merger.)

Copps also complained that the FCC did nothing to address the impact of the DirecTV deal on programming by minorities and consumer pay-TV rates. He even wanted the FCC to address the effect of media consolidation on what he sees as increasingly prevalent indecent programming.

The question for Roberts is deciding whether the price of winning approval from a Kerry FCC is too high. "Will the level of conditions be so deep," muses Levin, "that he won't do the deal?"