Will Moto Go Back to the Future?

4:45 PM -- We've outlined a few possible outcomes if Google (Nasdaq: GOOG) should decide to sell all or part of its cable division, with some a bit more outlandish than others. (See Why Google Will Dump Moto's Cable Biz and Is the Set-Top Duopoly on Its Deathbed? )

But there's another scenario involving a ghost of cable's past that's been circulating in recent weeks. It sounds not just outlandish, but maybe a little nutty. The scenario? How about Edward Breen swooping in to save Moto's entire cable business rather than seeing it chopped up and sold for parts?

Breen's already got a pretty good job. He's the chairman and CEO of Tyco International Ltd. (NYSE: TYC; London: TYI), which he joined in 2002. Before that he was the president and CEO of Motorola Inc., joining them in 2000 when Moto got into the cable business in a meaningful way via its acquisition of General Instrument Corp. (GI), where Breen was chairman, president and CEO -- the king, basically.

There are some different ways he could go about it. The less complicated path would see him leaving Tyco and rounding up some investors to make a play for Moto's cable division, which Google is expected to unload.

Or, he could stay with Tyco and make his play from there. But that one's a bit more of a tangled mess. It got a little less messy last November when Breen resigned from the Comcast Corp. (Nasdaq: CMCSA, CMCSK) board in part because he's also on the board of ADT Security Services Inc., a unit of Tyco's that creates an apparent conflict with Comcast's budding Xfinity Home business. (See Comcast Goes Big With Xfinity Home .)

Breen's currently in the process of dividing Tyco's businesses into three separate publicly traded companies: ADT, Flow Control (water and environmental systems) and Commercial Fire and Security. That's expected to take a year.

And here's where things take a turn for the weird, if it isn't already. It's been suggested that Breen could be swayed to sell ADT to Comcast, thrusting the MSO atop the security and monitoring market and clearing the way for Breen to have a go at Motorola's cable business and maybe spin it off.

In either scenario it would bring everything full circle and amount to the second coming of GI. Sure, there are lots of new faces at Motorola since the GI days, but the deal would reunite Breen with Dan Moloney, now president of Motorola Mobility and the guy in charge of its video network infrastructure and home devices portfolio.

I'll admit that the idea has lots of moving parts, but the more I think about it, it's an idea that could make some sense. Google must realize that Moto's cable business won't be effective if the MSOs don't trust them. Selling it to Tyco or to a group led by Breen could be an option that cable would not just live with, but support.

But can a path paved with the past place cable on a smooth road to the future? Whoever is in charge of the cable business will be required to innovate and move much faster than when Breen was at the helm years ago when decrying the faults of the much-maligned DCT5000 set-top was a spectator sport.

That's a tougher one to know, but it may beat an option that would see the meat of GI/Moto cable legacy and its institutional knowledge ground up into bite-sized portions that can be swallowed up and absorbed by others, perhaps never to be heard from again.

— Jeff Baumgartner, Site Editor, Light Reading Cable

Duh! 12/5/2012 | 5:39:51 PM
re: Will Moto Go Back to the Future?

...what about the possibility of spinning MOT's connected home business out, through a management-led LBO, private equity or even an IPO? 

Jeff Baumgartner 12/5/2012 | 5:39:42 PM
re: Will Moto Go Back to the Future?

some interesting ideas there, too. I imagine there are people still at Moto who could go for that if the other option was to be torn up. maybe some of them can hook up with Breen and make a go of it. JB

Paul111 12/5/2012 | 5:39:41 PM
re: Will Moto Go Back to the Future?

Ed Breen will essentially be out of a job by yearend and he is only 55. Following is an excerpt from the press release announcing the split up of Tyco:

Upon completion of the transaction, it is contemplated that Breen will become non-executive chairman of the commercial fire and security company, a director of the flow control company, and a consultant to the ADT North America residential company.

In addition, he is a member of the Advisory Board of a private equity firm - New Mountain Capital. Private equity firms like to have experienced management running companies they buy.

Jeff Baumgartner 12/5/2012 | 5:39:37 PM
re: Will Moto Go Back to the Future?

Thanks, you're right, it looks less far-fetched when you put it like that, and note that Breen's role will be reduced there. I didn't see the Mountain Capital connection, so that's very interesting. The window for this sort of thing may indeed be more open than I thought.  JB



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