Comcast strikes deal for NBC Universal
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In a momentous shift in the balance of power of the entertainment industry, cable television giant Comcast Corp. announced this morning that it was acquiring control of NBC Universal from General Electric Co.
The proposed $30-billion transaction is the fruition of a longtime ambition by Comcast’s 50-year-old chief executive, Brian Roberts, to recast his family-controlled Philadelphia company into a leading producer of movies and television shows and a purveyor of prominent cable and broadcast networks, including the venerable NBC.
The deal will face a heavy regulatory review and could take as long as 18 months to close. Comcast has already sent a five-page letter to lawmakers outlining steps it will take to ease concerns about the market power that the new entertainment giant will possess. For more on the Washington angle to this deal, see our story here.
Under terms of the deal, Comcast will contribute its entertainment channels, including E and Versus; nine regional sports networks; and about $6.5 billion in cash in exchange for 51% of the new venture, which will continue to be called NBC Universal for the immediate future. For more details on how this marriage came to be and what it means for the media landscape, please see our story here.
The deal underscores how cable television — not a broadcast network or a Hollywood movie studio — has become the new profit center for media conglomerates.
GE, which has owned the NBC network for 23 years, will reduce its ownership in the company to 49%. The deal sets up GE for a gradual exit from the entertainment business, granting Comcast the right to buy out GE’s interest within eight years.
-- Meg James and Joe Flint
