Friday, December 4, 2009

Comcast confirms NBC buy

Comcast Corp. announced Thursday it plans to buy a majority stake in NBC Universal for US$13.75 billion, giving America's largest cable TV operator control of the TV network, an array of cable channels and a major movie studio.
Although the deal could mean that movies might reach cable more quickly after showing in theatres and that TV shows could appear faster on cellphones and other devices, it was already raising concerns that Comcast would wield too much power over entertainment.
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 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 per cent 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.
Deal in production for months
Comcast's Roberts and GE chief executive 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 is eager to diversify as 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.
Comcast pledged Thursday that NBC Universal shows that now cost money over its cable video-on-demand service would be free for three years after the deal closes.
Comcast also said it would maintain free over-the-air television signals from NBC stations — a business model that is eroding because of falling advertising revenue. Comcast also pledged to improve public interest programming. And it said it would not let its business interests affect NBC News.
Competition worries
But consumer advocates worry about the deal, saying people could end up paying more for TV. 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 content.
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.
NBC Universal is profitable, with operating earnings of $1.7 billion US on revenue of $11.2 billion US in the first three quarters of 2009, despite weakness in the fourth-place NBC broadcast network and at Universal Pictures, ranked sixth in North American box office gross this year.
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 it loses subscribers to rival providers.
Meanwhile, GE needs cash to prop up its financing unit, GE Capital, which was devastated in last year's financial meltdown.
GE retains minority stake
Under the deal, expected to close in a year if regulators and shareholders of both companies approve, GE would buy Vivendi SA's 20 per cent stake in NBC Universal for $5.8 billion US — with $2 billion payable in September 2010 if the deal hasn't closed by then, and the remaining $3.8 billion at closing. NBC Universal is to be separated into a new joint venture.
Comcast would buy a 51 per cent stake of the new company by paying $6.5 billion US in cash and contributing $7.25 billion worth of cable channels it owns, including E!, Style and Golf Channel.
GE would retain a 49 per cent stake, with the option of unloading half of this interest in 3 1/2 years and all of it in seven years. The new company or Comcast could buy out GE. The new NBC Universal would borrow $9.1 billion US that would partially go toward covering the money GE owes Vivendi.
Comcast would get to name three people to the board and GE two, and Comcast would manage the joint venture. Jeff Zucker would remain NBC Universal's CEO and report to Comcast chief operating officer Steve Burke. NBC Universal's headquarters are expected to stay in New York.

Read More......


Post a Comment

Copyright (c)onine sports news | hot chicks and beer sexist Blog Page : ipl cheer girls