Comcast, NBCU Seal the Deal
Comcast Corp. (Nasdaq: CMCSA, CMCSK) and
General Electric Co. (NYSE: GE) sewed up their $30 billion deal late on Friday, Jan. 28, creating a new joint venture and media behemoth now called NBCUniversal LLC . (See Comcast Clinches NBCU Deal .)
Comcast owns 51 percent of the property, with GE owning the balance. NBCU, now helmed by former Comcast COO Steve Burke, will keep its headquarters based in New York City, but its new logo is losing the iconic peacock.
Comcast and GE announced the deal on Dec. 3, 2009. Friday's close came ten days after the Federal Communications Commission (FCC) and U.S. Department of Justice approved the deal with a bevy of conditions, though many, including a provision that Comcast offer a standalone broadband service, were already covered or were going to be covered by Comcast's normal course of business. The DoJ, however, did require Comcast to relinquish its management role at the Hulu LLC Web-TV joint venture.
Regardless, "none of [the conditions] will prevent us from executing on our business plans or will impair the competitiveness of any of our businesses," Comcast EVP David Cohen told reporters and analysts soon after the government blessed the deal.
Why this matters
Comcast, which tried and failed to buy Walt Disney Co. (NYSE: DIS) in 2004, is gaining control of NBCU as it and other cable operators find themselves doing battle with Netflix Inc. (Nasdaq: NFLX) and other over-the-top competitors that threaten to turn MSOs into dumb pipes and spur the growth of so-called "cord-cutters" that are capable of doing even more damage to cable's eroding video subscription base.
Comcast is also shoring up its programming assets as even more power swings in favor of content owners and as traditional video service providers (and OTT players) attempt to secure rights to distribute movies and TV shows on a broader range of devices and fuel their overall TV Everywhere strategies. (See Charter's TV Everywhere Rollout on Hold, Suddenlink Blames Netflix Contracts and Netflix Gets Hamstrung on Leased TiVos.)
It will obviously be easier for Comcast to negotiate those rights with a corporate cousin, though the government will be keep a close eye on those deals to ensure that other service providers get a fair shake at obtaining similar terms.
The government has left a door open to online video distributors (OVDs) so they can gain access to NBCU's full stable of programming, including its stable of linear feeds, but they can't "cherry-pick" programs or channels. Just like traditional MSOs, OVDs will be on the hook for affiliate fees, retransmission fees and other revenues that NBCU would stand to lose if it were to offer its content online. (See Comcast-NBCU Rules to Frustrate OTT Players.)
For a historical look at Comcast's chase for NBCU, please check out these stories:
- Bracing for the Comcast-NBCU Clincher
- FCC Blesses Condition-Laden Comcast-NBCU Deal
- Comcast-NBCU Faces Full-Court Press
- FCC Eyes Conditions for Comcast-NBCU Merger
- ACA: Comcast-NBCU Deal Could Cost Subs $2.4B
- Burke to Become CEO Of NBCU
- WOW: Comcast-NBCU Menaces Service Rollouts
- Policy Watch: Another Grilling for Comcast-NBCU
- Comcast: NBCU Deal Won't Kill Web TV Players
- Comcast to Take Control of NBC Universal
— Jeff Baumgartner, Site Editor, Light Reading Cable