Issue of the week: What does Comcast see in NBC?

By acquiring control of NBC Universal, Comcast would get Universal Pictures, the NBC broadcast network, 10 local TV stations, programming franchises like Law & Order, and a collection of cable channels including MSNB

Last year, General Electric CEO Jeff Immelt said he had no plans to sell NBC Universal, the conglomerate’s media and entertainment unit, said Cynthia Littleton in Variety.com. Apparently, he’s changed his mind. GE is now negotiating to sell a majority stake in NBC Universal to Comcast, the largest U.S. cable operator. Comcast Chairman Brian Roberts, who in 2004 mounted an unsuccessful $54 billion bid for Disney, “has made no secret of his interest in getting deeper into showbiz.” By acquiring control of NBC Universal, Comcast would get Universal Pictures, the NBC broadcast network, 10 local TV stations, hit programming franchises like Law & Order, and a “strong portfolio of cable channels,” including MSNBC, USA, and the Weather Channel. GE, for its part, would limit its exposure to a business that’s been struggling of late and that has never meshed well with the conglomerate’s core industrial holdings.

To gain its prize, however, Comcast would have to pull off a complex “chain of deals and agreements,” said Evan Hessel in Forbes.com. The first step is to convince Vivendi, the French media conglomerate that owns 20 percent of NBC Universal, to sell its stake. Then Comcast and GE would form a new company consisting of NBC Universal’s assets and the cable channels that Comcast already owns, including E! and Versus. Comcast would pay GE a “hefty” $6 billion or so for 51 percent of the new company. The arrangement would need the blessing of the Federal Communications Commission, which “may be inclined to fight” a deal that would concentrate so many valuable properties under a single corporate umbrella. And finally, GE and Comcast would “have to convince their shareholders of the value of connecting a content company with an entertainment distributor, an idea that has fallen out of favor in recent years.”

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