Comcast, GE Strike a Deal on NBC Universal
Posted by Jesse Ward on Monday, December 7, 2009 · 
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It’s official. Late last week, Comcast, the nation’s largest cable operator, announced an agreement to acquire NBC Universal from the General Electric (GE) Company. The deal valued NBC Universal at about $30 billion. As expected, the agreement gives Comcast 51%, and G.E. 49% ownership of the new joint entity which will not only produce content, but also control consumer’s access to it.
Comcast will contribute its cable channels to the joint venture, which include Versus, the Golf Channel and E Entertainment, worth about $7.25 billion, and will pay G.E. about $6.5 billion in cash, for a total of $13.75 billion.
Most of NBC’s value is in its cable channels — USA, Bravo, SyFy, CNBC and MSNBC. These networks, along with the channels that Comcast will contribute to the joint venture, will compose 82% of the company’s cash flow. The NBC network and Universal Studios will account for only a small portion of the joint company’s cash flow.
In a joint statement announcing the agreement, Comcast CEO Brian Roberts said the deal was “a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding.”
The merger has a large impact on the future of television programming, which will be viewed via mobile devices, computers and traditional televisions in American living rooms. Bernstein Research has estimated that the combined media giant “would be calling the shots for one out of every five viewing hours in the United States.”
NBC and Comcast have existing online properties that they bring to the table. As to what will become of them, Comcast told the Wall Street Journal that Hulu (the online-video site jointly owned by NBC, News Corp. and Disney) and TV Everywhere (Comcast and Time Warner’s online-video initiative) are complementary products, with broadcast TV shows appearing on Hulu, and premium cable programs on TV Everywhere. As of now, there are no plans to change Hulu’s free content model. (Of note, Hulu attracted 856 million viewers in October, a 47% increase from the prior month, this according to comScore.)
One important footnote: the deal is subject to regulatory approval, a long and potentially contentious process.
View G.E.’s release.
More on TV Everywhere, Hulu and the merger.
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