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Comcast in deal talks with NBC Universal

Cable giant Comcast Corp. is kicking the tires of NBC Universal, according to people familiar with the situation.

Comcast, the nation's largest cable operator with almost 25 million subscribers, has been looking to increase its content holdings for several years. In NBC Universal it would get its hands on not only a big broadcast network and movie studio, but also several powerful cable channels, including USA, Syfy, CNBC, MSNBC and Bravo.

NBC parent General Electric has often denied that it is interested in selling its entertainment holdings. Of course, if history is any guide, Comcast doesn't necessarily wait for an invitation before making a play. Five years ago it made an unsuccessful run to buy Walt Disney Co. for $54 billion.

The price tag for NBC Universal would be substantially less than that. A recent analyst report from J.P. Morgan analyst Stephen Tusa valued NBC Universal at $30 billion to $35 billion. However, such a deal would likely be very complex because there would be huge tax implications for NBC Universal parent General Electric, which first bought NBC in 1986 for $6.5 billion. 

That is still a pretty steep price tag for Comcast to swallow. The cable giant has a market cap of $48 billion and about $4 billion in cash so if it were to buy all of NBC Universal, it would be a highly leveraged transaction.

Speculation that GE may be looking to unload NBC Universal has heated up as of late in part because the French conglomerate Vivendi, which holds a 20% stake in the entertainment unit, may look to unload its interest before the end of the year. There have been questions raised as to whether GE -- which has first dibs on the Vivendi interest -- could muster the $4 billion - $5 billion needed to buy back the stake or whether another company such as cash-rich Time Warner or Comcast would step in and buy it.

Whether Comcast is making a serious run at all of NBC Universal outright or just in acquiring a stake in the company or forming a joint-venture remains to be seen.

In a statement, Comcast denied a report from industry website The Wrap that it had a deal to buy NBC Universal, but it declined to elaborate on any other talks it may be having with NBC Universal. A spokeswoman for NBC Universal declined to comment.

For Comcast, getting all or some of NBC Universal would give it programming assets to match its distribution clout. It currently only owns a handful cable networks including E! Entertainment Television, Versus, the Golf Channel, G4 and 10 regional sports networks. None of its cable networks have the commercial success of NBC's assets.

While NBC has lots of assets, many of its entertainment holdings are struggling. Its Universal Studios is in a slump at the box office and its management the NBC network is mired  in fourth place in both viewers and demographics. It's big gamble this fall, putting Jay Leno on in prime time, has not delivered big ratings yet although it may prove to be a smart financial gamble. In the first half of 2009, NBC Universal made $1.6 billion on revenues of $7.5 billion. Its revenue accounts for less than 10% of General Electric Co.'s total revenue.

-- Joe Flint

Previous Posts:

Vivendi's Levy stays mum on plans for NBC Universal stake

New round of speculation starts on GE's plans for NBC

Comments () | Archives (51)

If this happens, say goodbye to Hulu because Comcast already owns Fancast and their own cable system which are eating into their own profits for cable anyway.

I hate Comcast and I really hope this deal does not occur. The last thing consumers need is Comcast getting their hands on more television properties. Ownership of both Hulu and Fancast would enable Comcast to start charging for web video that's currently free because there would be no, legal, true competition.

The Wrap is not always correct?
And around 2 1/2 hours later, the N Y Times claims that Comcast Denies Talk of Deal for NBC Universal.
“While we do not normally comment on M&A rumors, the report that Comcast has a deal to purchase NBC Universal is inaccurate,” the spokesman said.
(Update 10:03 p.m. People briefed on the matter also denied the report of an imminent deal to DealBook.)

Lest we forget, NBC was the #1 network when GE bought it from RCA.

They "managed" it into the toilet. Only took them 24 years to figured out they didn't know what they were doing.

We also noted Comcast's statement about The Wrap. Alas, the statement only deals with one specific point of their story.

GE isn't going to get rid of their infomercial mouthpiece for the Obama agenda, they stand to benefit way to much from his policies for that to happen.

If they buy it, and then apply the Fox model for content, this could be a very good deal indeed. NBC Jeff Im. has been imploding audience numbers due to his political persuasions. Hire some journalists that appeal to the red states and it could be the turn around of the century.

So what if Hulu goes? Chinese websites (and there are way too many to block) have far more than Hulu ever had and it is all FREEEEEE. You can, for example, get all the seasons of Hill Street Blues, all the Star Trek series and even movies just released to theaters - all streamed, not downloaded. And what are we going to do, invade China and stop them? The Chinese are absolutely shameless in these matters-I was there when they had Star Wars Revenge of the Sith a full week before it was released to theaters with a copy stolen from the editing for a mere 12 RMB ($1.50). I also recall you could by anything Microsoft for a buck (about 8 RMB). And what did Bill Gates respond to this outrage? He had a big dinner honoring Hu Jintao when he came to the US. And then there are the streamed cable channels - all FREEEEE. I love it when these ELITES who believe in Globalism take a thorn bush 12 inches in diameter right up their butt.

Let CNBC, which has a very appealing personality asset, allow its commentators to provide honest journalism without the obvious political pandering that always drives the viewers away. Example, when Rick from the Chicago floor ranted about tea parties, the whole world was watching. When the big boss got hold of him and curtailed his comments, nobody cared anymore and Fox Business got a boost. Fox is bringing in some nice extras beginning next week.

Of course, if(when) Obama secures the Olympics for Chicago, he secures it for NBC! This of course makes the asset more valuable, and pleases Jeff Immelt one of Obama's economic advisors and the big wheel of GE(NBC). It's payback for all that Obama TV time which has been a huge advertising money loser for NBC.

Comcast should mind its own business and stay away from content. Ownership of NBC would make it unfair to other distributors.

The ego's over at GE and NBC never cease to amaze me. Rather than do the right thing by firing wack jobs leftists who are brain dead such as Keith Obeiborman and Rachel Maddow and hiring someone who can compete with Fox's Hannity, Beck and O'Reilly; but these draconian leftist sympathizers maintain their flawed scheme and continue to cater to a minority of viewers who hate America....ie.......hippy liberals and Ivy league goons. This company could have been successful if they had just one molecule of belief in God and passion for the greatness of these country but "NO"......they have to slant and manipulate the news to level of socialist philosophy but shoving cr*ap up our rear ends.

If Comcast buys NBC, I will switch to Verizon Vios.

conservative pro capitalist nbc would be nice

I hope so. I committed to never watch NBC again as long as GE owns them. It's been about 4 years.

I hope GE goes broke.

I should add, GE is totally corrupt and in bed with Obama. They got bail-out money and Jeffrey Immelt is on Obama's corrupt finance board.

if comcast gets in bed with this corrupt co.'I will drop them faster than olbermann's ratings

Comcast is a despicable greedy company. If people only knew the half.

I hope it happens because Comcast CEO John Malone is a patriot, and I'm sure he would quickly reorient MSNBC back towards the political center and fire their obnoxious, far left hosts-Obermann, Maddow, etc.

Wow... I'd be amazed this would get approved as Comcast would have quite a hold on cable operations and programming. They already tried to strongarm DirecTV into paying more for VS, and DirecTV dropped the channel, but if they controlled that much of the cable dial, they could make it hard for non-comcast systems to avoid paying much larger sums for programming they currently carry. Which means all of our cable/sat bills will be covering the cost of this deal... Less competition is never good!

Maybe Comcast can transform NBC news divisions into a legitimate platform that all Americans can trust.

NBC, aka, The National Barack Channel has little to offer most viewers. I would wait a few more months and pick it up at a fire sale. GE would love to be rid of Maddow, Olberman, and Williams. This is the natural end of all looney leftys.

Who would want to buy a loser like NBC? I guess if you need a tax write off. It's like NBC is trying to get bad rating. Very odd??? Maybe their looking for a government bailout? Poor little nbc don't have any influence anymore. Jonny is crying in his grave. MARXIST=DEMOCRATS=TERRORIST All the same Ask the losers at nbc.

The people Bell Telephone dead or alive must be doing backflips over the amount of a presence Comcast and other companies like them are allowed to take.

The good thing about Comcast allowing to grow bigger and bigger is it will eventually self-implode. Once they reach the point where everyone either has them or has had enough of them where will they turn? They already raise rates yearly, they don't really have any government oversight (or listen to it anyhow), will they too be deemed by the government too big to fail at one point and get a taxpayer bailout?

Who had this story first, you or Sharon Waxman on "The Wrap"? Was her story actually exclusive?

The day Comcast becomes Keith Olbermann's employer is the day I swtich my cable service to AT&T.

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