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Keeping Up With Comcast

11:00 AM -- Comcast Corp. (Nasdaq: CMCSA, CMCSK) is apparently not ready to fork over $35 billion to get NBC Universal , but it may be willing to spend much less to obtain a controlling stake in a newly spun-off version of the video content factory.

Broadcasting & Cable reports that Comcast and NBCU owner General Electric are discussing a deal that would pool the assets of NBCU and Comcast's own programming networks (E!, Style, Versus, Golf Channel, and a number of regional sports networks), and give the MSO a 51 percent stake (and the management role) in the resulting larger version of the media giant. GE would own the balance. A Comcast cash contribution of between $4 billion and $6 billion would also be a lighter hit on the MSO's wallet.

Still, the whole thing hinges on whether Vivendi is willing to sell its 20 percent stake in NBCU. Comcast has not offered any further public comment on the speculation beyond yesterday's denial of the original report saying the MSO had a deal in place to buy the programmer. (See Does Comcast Have Eyes for NBCU? )

Sanford C. Bernstein & Co. Inc. analyst Craig Moffett warned in a note this morning that any deal involving Comcast "remains far from certain, and… is only one of a number of options for GE." He adds that the structure of such a deal is also subject to some significant changes, "given its complexity and the involvement of multiple constituencies."

Even under the more recently reported deal structure, Moffett still views it as a "net negative" for Comcast, citing potential regulatory burdens that could impair a final agreement. But, on the plus side, he estimates that the partnership would give Comcast control of content that accounts for roughly 20 percent of U.S. viewing hours, and give it better leverage as it pursues "TV Everywhere" distribution models.

— Jeff Baumgartner, Site Editor, Cable Digital News




Interested in learning more on this topic? Then come to TelcoTV 2009, the telecom industry’s premier event for the exploration of a comprehensive entertainment convergence strategy, to be staged in Orlando, Fla., November 10-12. For more information, or to register, click here.


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