Tom Shales, the famously cranky TV critic at The Washington Post, is predicting that Jay Leno's new show may not survive if Comcast Corp. (CMCSA) takes over NBC Universal.

"Among the first items of business [following a Comcast takeover] might be the undoing of another deal: the pact NBC made with Jay Leno, giving him the last hour of prime time Monday through Friday all year," Shales wrote. "So far, 'The Jay Leno Show' has been a ratings weakling with a strong negative effect on the rest of the NBC prime-time schedule."

There was no immediate comment from NBC brass on Shales' story, which seems entirely plausible. GE executives said today they were pleased with the show's launch. But as today's earnings announcement from General Electric Co. (GE) underscores, NBC Universal's importance to GE is vastly overstated by the press. Call it the power of show business. While NBC Universal is a huge company by most measures, it is surrounded by scores of other GE businesses that are much, much bigger.
NBC Universal has also long underperformed its sister GE businesses. This quarter was no exception. Revenue fell 20 percent to $4.08 billion while profits, excluding the reduction of its stake in the A&E Television Network, fell nine percent. The Universal film studio and theme parks businesses both performed poorly. One bright spot was the cable business, seen by analysts as one of reasons Comcast wants NBC Universal, with channels such as Syfy, Bravo and CNBC posting gains.

On a revenue basis, only GE's Consumer & Industrial unit is smaller. In the nine months ended September 30, only GE Capital had a bigger profit decline.

During today's earnings conference call, only one Wall Street analyst asked company executives a question about the potential deal with Comcast, and he did not get much of an answer. "NBC Universal is a great franchise," said Chief Executive Jeffrey Immelt. "It's a solid performer. Vivendi has been a great partner. . . . This year, we wanted to be ready for several scenarios including an IPO or another partner."

Investors have long wondered by the world's largest maker of aircraft engines needed to have a foothold in Hollywood, which it has had since 1986. In the 21st century, such a business combinations make no sense, if they ever did.

For the deal to make sense to Comcast, big changes have to be made to NBC Universal including the former "Tonight Show" host's deal struck with Jeff Zucker. As Shales writes, Leno has infuriated Hollywood producers by insisting that no "depressing shows" be aired in the nine o'clock hour before his program, "virtually eliminating all opportunities for serious dramatic television on NBC."

Shares of Fairfield, Conn.-based GE fell today after the conglomerate failed to wow Wall Street with its third quarter results. Profit from continuing operations was $2.5 billion, or 22 cents a share, down 45 percent from $4.48 billion, or 45 cents, a year earlier. The average profit estimate in a Bloomberg survey, excluding some items, was 20 cents a share.

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