Watch Out, ESPN: Comcast Forms Big Rival with NBC Universal

Comcast's acquisition of NBC Universal got the green light from the FCC and the Justice Department on Tuesday.Comcast's (CMCSA) takeover of NBC Universal was approved, as expected, by the Federal Communications Commission and U.S. Department of Justice on Tuesday, creating a media and entertainment colossus with a huge footprint in television, movies, the Internet and theme parks. The deal will also create a sports behemoth that could challenge the dominance of Walt Disney's (DIS) ESPN.

Comcast already owns the Golf Channel, which reaches 120 million homes; Versus, which reaches 75 million homes; and 14 local networks that deliver 2,400 sporting events annually to more than 50 million homes with cable and satellite. It also owns the Philadelphia 76ers professional basketball team and the NHL's Philadelphia Flyers, as well as the the Wells Fargo Center in Philadelphia, where the two teams play.

NBC Sports has broadcast more Olympics than any other network. It owns the rights to the Olympic Games through 2012 and also has aired 16 Super Bowls. Its properties include NBC Sunday Night Football, the U.S. Open Championship, The Ryder Cup, Presidents Cup, Kentucky Derby, Preakness Stakes, Wimbledon, French Open and the Stanley Cup Final. ESPN counts an estimated 100 million domestic subscribers, including both its main channel and ESPN 2, and often carries the most highly rated programs on cable. Both companies also have formidable presences online.

"The sports-media monster that comes from Comcast-NBCU has the potential to be the biggest alternative to ESPN in the history of sports media,"'s Dan Shanof writes on his blog. "No one will ever replace ESPN, but this might offer another comprehensive high-end option."

Behemoth Sportscast Rivalry Begins

Last year, Richard Sandomir of The New York Times went further, arguing ... "if Comcast is serious financially and qualitatively, it and NBC could turn Versus into a credible rival. It could turn Versus into a network that would provide cable operators (like Comcast) leverage in negotiations with ESPN. It might also make leagues giddy, knowing they could potentially juggle large-scale bids from Versus."

ESPN is a cash cow for Burbank, Calif.-based Disney. The company's Media Networks business, which includes the sports media network, earned $5.13 billion in operating income in the fiscal year that ended Oct. 2. It has been expanding into local markets, challenging Comcast's foothold in local markets. A spokesman for ESPN could not be reached for comment.

One of the first battles between the two big rivals may be over hockey.

According to SBNation
, the NHL's broadcast deal with Versus and NBC expires at the end of this year. ESPN, which wanted nothing to do with the NHL after the 2004 lockout, now wants hockey back because of its growing popularity along with its already-crowded line-up of programming ranging from the NFL to professional bowling.

"The NHL will become the foundation for whatever (NBC Sports head DIck) Ebersol, NBC and Comcast hope to build at Versus, and with that, the League will be in a very enviable position," according to the website.

A Deal Like No Other

Under the terms of the deal, Philadelphia-based Comcast will merge its $7.25 billion worth of cable channels -- including E! Entertainment Television, Versus and the Style Network -- with General Electric's (GE) NBC Universal assets, which are valued at $30 billion and include the NBC television network, Universal Studios and MSNBC. Comcast will wind up with a 51% interest in the new media conglomerate and will give it huge power to decide the content Americans read and watch. Critics say the deal goes too far.

"Comcast's acquisition of NBC Universal is a transaction like no other that has come before this Commission -- ever," FCC Commissioner Michael Capps, who cast the sole vote against the deal set to close later this month, said in a press release. "It reaches into virtually every corner of our media and digital landscapes and will affect every citizen in the land. It is new media as well as old; it is news and information as well as sports and entertainment; it is distribution as well as content. And it confers too much power in one company's hands."

Comcast rejects these criticisms, arguing that the transaction is pro-consumer. NBC Universal -- the named will be used by the new company as well -- will be required to take "affirmative steps to foster competition in the video marketplace," increase local coverage and expand children's and Spanish language programming, the FCC says. Moreover, it must provide discounted broadband services to low-income consumers and provide high-speed broadband to schools, libraries and underserved communities.

"This is a proud and exciting day for Comcast," Comcast CEO Brian Roberts said in a press release."Our original vision for the combination remains intact so that consumers will benefit, and our competitors will be treated fairly."

Activists immediately denounced the FCC's 4-to-1 decision, arguing that it placed too few restrictions on Comcast to prevent it from abusing its power at the expense of consumers. Comcast has customers in 39 states and the District of Columbia and reaches close to 24 million homes in the United States. NBC also owns a stake in the online video service, Hulu, as well as 26 local broadcast stations that reach nearly one-third of U.S. households.

Shares of Comcast, the world's largest cable company, grew slightly on the news. The shares have gained more than 37% over the past year. General Electric will reduce its ownership interest in NBC Universal from 80% to 49%. At its closing, the transaction will generate about $8 billion in cash with a small after-tax charge. Shares of the Fairfield, Conn.-based conglomerate were trading down in late afternoon action. Its shares have risen more than 13% over the past 52 weeks.

Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Banking Services 101

Understand your bank's services, and how to get the most from them

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

For all of you Philadelphia Flyers sports fans that live outside the Philly area and signed up with Directv for the Philly broadcasts and are wondering why you aren't getting them. Well I'll tell you. It's because Comcast and NBC have decided that we aren't worth it. That's right. The Fat cats in the PHILLY region are not allowing the feed because they are too money hungry and ,O, by the way, the philly region is the only one not sensitive enough to the millions of FANS across the country. I for one am furious over this deal because had I known I was not going to get my PHILLY announcers I would have never SHELLED OUT the $200.00 for the NHL ticket. I think it stinks and I for one am going on my own vendetta to show the rest of the country what kinds of creeps we have running the show @ Comcast in philly. (ie Mr.Snyder) You were a money grubber back in the 70's when you had control of who watched the Flyers and who didn't. It was known then as PRISM. REMEMBER? Now it's COMCAST under the guise of NBC UNIVERSAL SPORTS. The right thing to do would have been to put a disclaimer on Directv saying that due to contractural problems, the Flyers home broadcasts would NOT be available on Directv's NHL Ticket. But this didn't happen and so a lot of people shelled out the money under false pretense thinking the were getting one thing and not getting it at all. It's just as much Directv's fault as well because they knew all about it and said NOTHING!!!!! We who were TAKEN have NO recourse but to tell as many people about the SCAM as possible and hopefully something will be done about it. If you are disgusted as I am then you should FLOOD COMCAST, NBC UNIVERSAL SPORTS and any one else you can think of with letters of outrage as well as phone calls.

November 18 2011 at 5:54 PM Report abuse rate up rate down Reply

February 18 2011 at 5:44 AM Report abuse rate up rate down Reply

This is the same as Time buying AOL.With all the deals go the wheels.don't buy it.

January 20 2011 at 11:03 PM Report abuse rate up rate down Reply
dwight burns

And the beat goes on...and the beat goes
And we talk about, "The Day the music died," Television just did. Some say it's been dead.

January 20 2011 at 10:25 PM Report abuse rate up rate down Reply

Check out the conditions the Obama regime required to approve this Comcast/NBC meger. It should scare you, but I doubt it will because if your under 50 in this country you have no idea what freedom and the free market really is. No longer does something like this make it or not on the letter of the law, but on what the those in charge determine the conditions to be. Fear for this nation!

January 20 2011 at 8:58 PM Report abuse +1 rate up rate down Reply
3 replies to spmazanek's comment

once comcast takes over nbc ill go out of my way to never watch that network ever is the biggest crook out there..ive had to use comcast for yrs but im finally getting choises so i can get rid of comcast forever..there over priced garbage...

January 20 2011 at 7:47 PM Report abuse +1 rate up rate down Reply

Why do I get ESPN and Disney even though I have no interest. I have to go through 20 ESPN channels to get to one I want. Maybe my cable bill would go down if I had an option not to get it.

January 20 2011 at 6:18 PM Report abuse +1 rate up rate down Reply

!GOOD! I am so fedup wirh ESPN covering sports in grneral it always looked like it was more about ESPN than the game.

January 20 2011 at 4:01 PM Report abuse +2 rate up rate down Reply
Holly Pc

Remember those days folks..
NBC and CBS did the nfl sunday and ABC monday night
ABC had Monday night baseball Remember Howard Cosell ????
CBS had The NBA on sunday afternoon only
CBS did college football at 12:30 saturday afternoon
and a local channel Not major network. televised around 20 games each for your NBA and NHL games, IF you could pick it up that day.... Those were the days
Guys remember skipping or leaving school early to go home and watch that afternoon baseball playoff game if your tean was in the playoffs .

January 20 2011 at 8:24 AM Report abuse rate up rate down Reply

great! Espn has gotten too big for it britches! the are in co-hoots with the majoe sport affiliations! A new network will be more fan friendly and hire regular journalist. Not idiots like Jon gruden who studies too much tape using Pop Warner slang!

January 19 2011 at 11:50 PM Report abuse rate up rate down Reply