Word has been floating around for a long time that Comcast was interested in picking up NBC Universal from parent company GE, but early this AM Comcast made their move, announcing they planned to buy up 51% stake in NBC Universal, effectively merging the two companies. NBC Universal of course owns all the NBC networks including MSNBC and Telemundo, and Universal movie studios and theme parks. Here’s what Gearlog had to say about the matter:
As expected, Comcast on Thursday announced that it has brokered a deal with General Electric to acquire a 51 percent stake in NBC Universal (NBCU) for $6.5 billion.
The arrangement puts the value of NBCU at $30 billion. As part of the deal, GE will acquire Vivendi’s 20 percent stake in NBCU for $5.8 billion, putting GE’s stake at 49 percent. Comcast will make its $6.5 billion payment to GE.
The deal includes: NBCU’s businesses, Comcast’s cable networks, regional sports networks, and certain digital properties, Comcast said. NBCU will contribute its cable properties like MSNBC, broadcast stations NBC and Telemundo, the Universal movie studio and theme parks.
The combined entities will be known as the Comcast Entertainment Group (CEG), which will stand alongside Comcast Cable. Jeff Zucker, current president and CEO of NBCU, will be CEO of the new joint venture and will report to Steve Burke, Comcast’s chief operating officer.
Of course, tech pundits and officials came out of the woodwork to discuss the deal. Comcast has made it long known that they want some stake in the content that gets to their cable, broadband, and voice customers’ screens, whether those screens are large or small, television, internet, or mobile phone, and they’re very willing to spend the necessary money to make it happen. The problem with this though is whether or not Comcast owning so much television content like this will put them at an almost monopolistic advantage given their share of the broadband and cable markets, and now their share of the television markets.
Government officials were quick to point out that the deal still has to undergo extensive review and analysis by the FCC and other regulatory bodies, and may be subject to Congressional inquiry, which frankly I think is warranted in this case – and I’m certain Comcast’s competitors in the broadband and television spaces (and now their competitors in the television space) will have something to say about it. Comcast could very quickly pull any NBC Universal content from sites like Hulu in order to push its own competing service Fancast, which is similar but just not as popular. Comcast could start jacking up fees on services like DirecTV in order to allow them to carry NBC Universal content once it’s all owned by Comcast, although Comcast will likely say they won’t do that.
In any event, if the deal goes through, we’ll see more media in the hands of fewer and fewer companies, which leads me to believe it likely won’t go through. And to that point, if it does, it will definitely encourage DireTV and other cable/broadband companies to start snapping up content producers in order to control the channel of media to consumers in the direction that’s most beneficial to them. It’s also worth mentioning that the last major deal like this that brought together a media company and an access provider was the merger of AOL and Time Warner, and…we all know how well that ended up.
I’ll wait and see, but my gut says this isn’t a good bargain for consumers and people who enjoy both the access Comcast provides and the content that NBC Universal provides, and that bringing them closer will wind up leaving the consumer with fewer affordable or free options for obtaining and enjoying that content in ways that the consumer chooses – as opposed to their content provider.