"Cheese steaks for everyone," cracked one NBC Universal insider on the news that Philadelphia-based cable giant Comcast Corp. is interested in a controlling stake of the General Electric Co.-owned media company.
While neither side is talking yet, more details are starting to emerge here and there. CNBC's David Faber has reported that Comcast is looking to take a 51% stake in NBC Universal in a complex deal that would involve the combination of its programming assets (E!, regional sports channels, etc.) into a newly created entity that would also include NBC Universal's assets -- which include Universal Pictures, NBC, cable channels USA, Bravo, MSNBC.
The nitty gritty of all this is that Comcast would put in assets worth about $6 billion and come up with $4 billion to $6 billion and end up with control, according to a person familiar with the talks. GE would kick in $12 billion in debt and get a 49% stake.
The new company, it seems, would be strictly content as Comcast would continue to exist with its cable system holdings. In other words, think John Malone's Liberty Media.
Although there appear to be few regulatory hurdles to a NBC Universal-Comcast combo, creating a new content-only company may be another way to insure minimal government interference. There used to be rules prohibiting the ownership of broadcast television stations and cable systems in the same city, but the Federal Communications Commission blew those out years ago. However, there are still regulations in place that require companies such as Comcast that own both distribution and content to sell to competing distributors such as satellite and phone companies. Under this scenario, Comcast the cable operator could claim it has arm's length when negotiating to carry these cable assets.
-- Joe Flint
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