Comcast, GE near agreement valuing NBC Universal at $30 billion
Filed under: Company News, Media, General Electric , Comcast
Comcast (CMCSA), the nation's largest cable company, and GE (GE), the giant industrial conglomerate, are nearing agreement on a deal that would value NBC Universal, the huge entertainment company, at around $30 billion, sources familiar with the matter tell DailyFinance. If successful, the pact would pave the way for a distribution and content behemoth sure to attract attention from regulators. The new entity would dramatically alter the competitive landscape of a media world already wracked by Internet-driven disruption and the ever-increasing penetration of high-speed broadband service.Comcast, already a corporate giant, clearly sees the long-lusted-after golden chalice of a unified content and distribution system within its grasp.
Negotiations are still underway and the deal could fall through -- French media giant Vivendi (VIVDY), which controls 20 percent of NBC Universal, hasn't signed off yet -- but assuming negotiations are successful, an announcement could come as early as this week, according to knowledgeable sources.
An NBC insider told DailyFinance that the deal would be welcomed by many at the Peacock network. "We respect GE as a company, but I don't think anyone will really miss them -- we're just not a logical fit with the rest of their businesses, and they impose a significant amount of bureaucracy on us," the insider said.
Per the terms being discussed, Philadelphia-based Comcast would acquire 51 percent of NBC Universal, and contribute billions in cash as well as cable channels. General Electric, which currently owns 80 percent of NBC Universal, would hold on to the other 49 percent and contribute several billion dollars in debt to the new company. Earlier this month, Comcast reported a 22.5 percent rise in third-quarter earnings, beating expectations. The $30 billion valuation was first reported in The Wall Street Journal.
Antitrust Issues Could Complicate Deal
Comcast executives are keen on the prospect of gaining control of the media giant -- which owns the NBC TV network, the Universal movie studio and other valuable properties -- for less than 100 percent of the cost of the company, according to a sources familiar with the matter. It's highly unlikely that the valuation would rise beyond $30 billion, they say, and it could wind up below that.
Indeed, from Comcast's point of view, the deal makes a world of sense. As my colleague Jonathan Berr wrote, "For Comcast, an alliance with NBC Universal will provide with the content it needs to feed its expanding media empire."
Comcast already operates a vast broadband distribution network through which it delivers on-demand content. Gaining control of NBC Universal's rich stable of content would create an unrivaled media and distribution juggernaut. And that's precisely why regulators will be so keen to scrutinize this deal, should it happen.
"It's virtually guaranteed that FCC [Federal Communications Commission] regulators would review this deal," Glenn Manishin, a former antitrust counsel and trial attorney at the Justice Department's Antitrust Division, told DailyFinance last month. "This could be a signature case for Chairman [Julius] Genachowski to demonstrate the principles he enunciated when he was confirmed." Manishin predicted any deal would also face review by the Federal Trade Commission or the Justice Department.
Manishin said any deal is sure to raise red flags at the FCC on the issue of "vertical foreclosure," which concerns how Comcast could discriminate in favor of its newly acquired NBC Universal content against that of rival content producers. Manishin explained that in mega-media deals of this sort, the FCC typically takes a "prophylactic" -- or preventive -- role, while the Justice Department would wait until an anti-competitive action had occurred.
As the negotiations wend through the lawyers on all sides -- don't forget about Vivendi -- surely visions of synergistic media nirvana are tempered by the certain knowledge that this deal will not happen unless the federal government signs off on it. And that's the way it is.
Follow Sam Gustin, a reporter for DailyFinance, on Twitter here. Follow DailyFinance's tech coverage here.
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Reader Comments (Page 1 of 5)
11-09-2009 @ 2:11PM
Sonny said...
GM is dumping NBC because people are starting to boycott GE products in protest of NBC's biased reporting. NBC is dragging GE down. Why would Comcast want this same liablility......are they immune to the negatives associated with NBC? I don't think so........consumers have options such as Dish and Direct. I for one, will exercise my option. I currently have Comcast.......but on finalization of this deal, I will switch to another programming provider.
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11-09-2009 @ 11:29PM
Dave said...
Who cares? Who are you anyway? A nobody who gives a damn about television! Most of it is garbage and you consume it. Your comment is a golden example of that old saying: garbage in, garbage out. They've fed you garbage and you type it back out to us in the comment section of this article.
11-10-2009 @ 12:56PM
Felix Amat said...
Isn't it amazing that Comcast can offer $50 Billion dollars to fatten its income, when they can't offer shutins (handicapped people) a lousy 10% discount. What a wonderful company they must be.
11-09-2009 @ 6:35PM
L R said...
Cable could be a pig in a poke. Land line communication as it relates to phone systems is diminishing at a significant rate. China is on the fast track to developing a business cellular system* so they won’t have to rewire their country. Their economy is still exploding and they can’t wire up fast enough. The Beamers* Dish* Hughes and the rest of the satellite family are pumping money into space to improve speed. They have the speed* but there are safety issues to over come. Beam strength and width seems to be the problem. If they beam up too soon without the safe safeguards in place* we could all have Polosi eyes.
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11-09-2009 @ 6:49PM
Frank said...
Sonny, you're crazy. I work for NBC and I KNOW for a fact they tell the news straight ... just because the right wing zealots on FOX doesn't like NBC, it doesn't mean NBC lies. Remember, it was FOX that applauded every decision GW made ... which lead to the middle class shrinking by a third, the lowest levels of manufacturing since WWII, and the biggest stock market crash in 70 yrs. While middle class was being raped, as GW send their underequppied sons and daughters to war with no exit strategy, while the top 1% increased their wealth 16 fold, and more than 7 million middle class jobs were being lost.... FOX was there, every step of the way.. providing America with propaganda, lies and distortions.... BTW, the stock market is up 30% since Obama took office. I bet the Nazis at Fox aren't talking about that though, are they? Tell me, do they ever talk about the 65 million Cheney personally made off the war on Faux News?
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11-10-2009 @ 7:45AM
Fran said...
You go Frank! Tell them! What I'd like to know & cannot get anyone to answer me @ Comcast is this: In order to prove a point to Comcast I needed a copy of the "cashed" Money Order I gave them to start my service. So my Currency Exchange found it & copied both sides. Cash it they did! and promptly DEPOSITED MY MONEY INTO (GET THIS WILL TYPE THE WHOLE STAMP)--------"PAY TO THE ORDER OF BANK ONE NA, CHICAGO,IL 60670-0002>071000013< --------------------------------------------------------------------FOR DEPOSIT ONLY:
AT&T BROADBAND
LOC#85060302
5513782--------------------Now why would COMCAST DEPOSIT MY MONEY INTO AN AT&T BROADBAND ACCOUNT? This occurred 01/18/06. Since then I've contacted every "ConsumerAffairs" TV reporter & have never, ever received a reply....Why is that, too?
11-10-2009 @ 8:01AM
mvp019a said...
Frank: You are as bleeping stupid as the right wing zealots that you decry.
11-10-2009 @ 8:08AM
Lisa said...
Frank, you're a blithering idiot. That is all.
11-10-2009 @ 9:08AM
Marie said...
Anyone with more than three brain cells doesn't watch FOX news. Comcast is a monopoly. Where I live, you can't get anything but Comcast...please don't suggest Direct or Dish because they are not in the same league as cable, sorry. I'd love to have another option for my ever-increasing Comcast cable bill. The regulators need to look at Comcast, now! Don't wait for the GE deal. But, since Cheney the war-profiteer/war criminal is still walking free, I won't hold my breath waiting for the government to do anything that makes sense and upholds our current laws.
11-10-2009 @ 10:06AM
Chris said...
Frank, please give me some of whatever you are drinking or taking if you think that NBC news is telling it straight. NBC was the only news that I would watch for decades (I am only in my 40's) but had to stop after they stopped being reliable. It's not just that they are in school girl love with obama, it's anything that has to do with middle America (which by the way is conservative {read the polls more Americans regard themselves as conservative than any other group}) it's they are very self serving. Please tell me where the coverage was when it was discovered that GE has major dealings with Iran in clear violation of U.S. policies. These dealings have led to deaths of American soldiers, the advancement of Iranian development of nuclear weapons and more then likely terrorism against Americans (the latter is my speculation but the former 2 points are fact) and are still pending criminal charges pending further investigation. I can understand why you would be loyal to NBC because they provide your paycheck but to those of us who have no alleigance other than consuming we chose differently and the ratings show it. As far as your ranting about GW, he had to deal with things that no other president had to, starting with 9-11 (by the way if Clinton had taken Bin Laden when he was offered and the Saudi's offered him twice 9-11 would have never happened) and I felt safe with him. 7 1/2 years and no further terrorist attacks on U.S. soil, Obamashit is in office about the same out of time when the next terrorist attack hits, and by that I mean Ft Hood, and what is he doing but trying to make it look like anything other than a terrorist attack. Thanks for reading and have a great day. LONG LIVE AMERICA.
11-10-2009 @ 10:43AM
TruthBeTold said...
Frank, you're the idiot. They obviously have you driking the kool-aid over at NBC. Don't forget to mention how much OBAMA made on the Fanny Mae and Freddie Mac demise. Cheney wasn't the only one making money these past few years. Most of the democrats on the hill were as well! Also, the stock market is picking back up because that is what the stock market does, not because OBAMA took office. Wisen up. There are actually intelligent people in the USA and they are the ones NOT drinking the kool-aid.
11-10-2009 @ 10:44AM
Jo said...
Oh, but NBC and all of its affiliates do lie, that is why their ratings are in the basement. Nobody with any intelligence believes them. By the way, your grammar stinks, I hope you don't write for NBC
11-10-2009 @ 11:00AM
hardrocknox said...
Frank , Your not only biased you an idiot , NBC have been a total distortion of the truth , time after , time , after time . and yes every day FOX talks about stock and your 30 % is bogus as the company as you work for , remember it went down 30 % since the nimrod took office , Its just like a NBC employee to tell you its raining while he peeing down your back !and here's something NBC will not tell you , strait out of a com-cast managers mouth , They are going to start charging you by the Kilo bytes on every thing you down load of the inter net . That's a fact ! And VERY expensive
11-10-2009 @ 12:28PM
Quinn said...
Frank; With people like you working for a network that has lost 70% of its viewers in the last 3 years, its rich to see people like you spouting off as if its always someone elses fault that you and your network simply sux and is basically unwatchable.
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11-10-2009 @ 12:55PM
Felix Amat said...
To: 11-09-2009 @ 6:49PM
Frank said...
My condolences on your loss of your frontal lobe.
11-10-2009 @ 1:27PM
Lisa said...
Frank-NBC may not lie, but they don't report all of the news. They missed the ACORN scandal just to name one. Did you watch Fox news when GW was in office?? They were ROUGH on him. You hear these kind of things on NBC though and regurgitate them as if they're facts, but you did not actually watch Fox for yourself. Really, the "GW" vs "Obama" argument is getting old. If we can all quit playing the blame game and start uniting on the things we can agree on, the politicians will not know what to do but be afraid we will vote them out of office if they don't actually represent us, regardless of the media.
11-10-2009 @ 4:05PM
inserrawinter said...
you are so out of your mind, truth, you wouldn't know the truth if it bit you. Your spin leaves me dizzy.
11-09-2009 @ 7:20PM
Ben said...
I am now buying new LED Christmas lights to save energy. It was a great joy to buy Sylvania lights and not GE lights. I will not pay for Keith Olbermans salary.
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11-10-2009 @ 7:33AM
Jill said...
No one cares what you buy. You don't matter as much as you think you do.
11-10-2009 @ 11:20AM
Dennis said...
Ben, I am with you---I just bought a new washer/dryer for the house and wouldn't even consider GE. Jill: Ben represents a lot of us in this country---it is you that is a the liberal left moron who cannot think for yourself. I'd love to have the opportunity to debate your sorry a##. People like you who just believe what they are told, don't pay attention, don't do their own research, and don't connect the dots are exactly the reason why Pelosi et al are having their way in DC. Wake up you idiot. And let me guess--you're a 20something know it all. Tell me, how does it feel to be about $200K in debt thanks for Obama and company? Someday when you are older, you'll wake up and smell the coffee, that is of course if you can afford it.