Tags: us | comcast | nbc

Comcast to Buy Controlling Stake in NBC Universal

Thursday, 03 Dec 2009 06:36 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

PHILADELPHIA -- Comcast Corp. announced Thursday it plans to buy a majority stake in NBC Universal for $13.75 billion, giving the nation's largest cable TV operator control of the Peacock network, an array of cable channels and a major movie studio.

Although the deal could mean that movies could reach cable more quickly after showing in theaters, and that TV shows could appear faster on cell phones and other devices, it was already raising concerns that Comcast would wield too much power over entertainment.

Indeed, if the deal clears regulatory and other hurdles, Comcast would rival the heft of The Walt Disney Co. _ which Comcast CEO Brian Roberts already tried to buy.

Comcast, which already serves a quarter of all U.S. households that pay for TV, would gain control of the NBC broadcast network, the Spanish-language Telemundo and about two dozen cable channels, including USA, Syfy and The Weather Channel. It also would get regional sports networks, Universal Pictures and theme parks.

In agreeing to buy 51 percent of NBC Universal from General Electric Co., which has controlled NBC since 1986, Comcast hopes to succeed in marrying distribution and content in a way Time Warner Inc. could not. AOL and Time Warner are undoing their ill-fated marriage Dec. 9. Time Warner has already shed its cable TV operations.

Comcast's Roberts and GE CEO Jeff Immelt have been discussing the deal for months, and the final weeks came down to GE's persuading French conglomerate Vivendi SA to first sell its minority stake.

Comcast made the deal because it is eager to diversify its holdings. It faces encroaching threats from online video and more aggressive competition from satellite and phone companies that offer subscription TV services.

For entertainment viewers, the deal means Universal Pictures movies could get to cable faster.

TV shows could appear on mobile phones and other devices faster as part of Comcast's plans to let viewers watch programs wherever they want. Comcast already is letting subscribers watch cable TV shows online in trials, with a nationwide launch in December.

But consumer advocates also worry that people could end up paying more for TV.

Under Comcast, subscription-TV operators such as DirecTV Group Inc. and Verizon Communications Inc.'s FiOS service would be negotiating with a direct rival on how much they have to pay to carry NBC Universal's cable and broadcast channels.

An NBC Universal under Comcast might be less willing to budge than one under GE. Consumer groups worry that as a result, fees that are already creeping up could rise even faster, with the costs passed to customers in their monthly pay-TV bills.

Other cable TV companies could face similar pressures, although they don't compete with Comcast because each one operates in a separate market.

NBC Universal is profitable, with operating earnings of $1.7 billion on revenue of $11.2 billion in the first three quarters of 2009, despite weakness in the fourth-place NBC broadcast network and Universal Pictures, ranked sixth in North American box office gross this year by Rentrak Corp./Hollywood.com.

Comcast wants the company largely for its lucrative cable channels. It is seeking more programming to beef up its video-on-demand offerings and rely less on cable revenue as the company loses subscribers to rival providers _ such as phone companies that are offering TV services _ or the Internet.

Meanwhile, GE needs cash to prop up its financing unit, GE Capital, which was devastated in last year's financial meltdown.

Under the deal, expected to close in a year if regulators and shareholders of both companies approve, GE would buy Vivendi SA's 20 percent stake in NBC Universal for $5.8 billion and spin NBC Universal off into a new joint venture.

Comcast would then buy a 51 percent stake of the new company by paying $6.5 billion in cash and contributing $7.25 billion worth of cable channels it owns, including E!, Style and Golf Channel.

GE would retain a 49 percent stake, with the option of divesting completely in seven years. The new NBC Universal would borrow $9.1 billion that would partially go toward covering the money GE owes Vivendi.

Comcast would manage the joint venture. Jeff Zucker would remain NBC Universal's CEO and report to Comcast Chief Operating Officer Steve Burke.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Marketing Expert: Apple Pay May Bring 'Digital Wallet' Future

Wednesday, 22 Oct 2014 15:24 PM

pple's new mobile payment system, Apple Pay, is a quick, convenient and secure method of making purchases online and off . . .

Apple CEO Discusses Security with Top Chinese Official amid Hacking Claims

Wednesday, 22 Oct 2014 06:30 AM

Apple Inc Chief Executive Tim Cook discussed user data security at a meeting on Wednesday with a top Chinese government  . . .

Sen. Leahy Urges Comcast to Extend Net Neutrality Pledge

Tuesday, 21 Oct 2014 12:40 PM

Vermont Sen. Patrick Leahy, the chairman of the Judiciary Committee, has called on Comcast to extend its net neutrality  . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved