Bloomberg LP has officially come out against the merger of cable conglomerate Comcast Corp. with entertainment giant NBC Universal.
In a letter to the Federal Communications Commission and the Justice Department, Bloomberg, the financial news service company, warned that a combination of Comcast, the nation's largest broadband and cable provider, with NBC Universal is bad news.
"Put simply, as the owner of both content and the means of distributing that content, Comcast will have every reason to undermine the many independent news, sports and entertainment channels that compete with the channels it owns," Bloomberg said in its letter which was also co-signed by the Communications Workers of America, National Consumers League, the Writers Guild of America, West, and several advocacy groups and media watchdogs.
Although Bloomberg is best known for its terminals that provide up-to-the-minute financial news to traders, it also has its own financial news cable channel that competes with NBC's CNBC as well as Fox Business. Bloomberg's channel has a much smaller reach than CNBC. Bloomberg Television is in about 65 million homes, compared to almost 100 million for CNBC. Fox Business Network is in over 50 million homes.
Bloomberg's biggest concern is that Comcast will give CNBC a better channel position than its competitors. Of course, on most cable systems, including Comcast, CNBC already has a better channel position than Bloomberg. That is partly due to CNBC being over 20 years old and fairly entrenched in prime real estate.
Cable networks often try to cut deals with cable operators to improve their channel position, and Bloomberg fears Comcast won't play ball if it owns CNBC.
On its corporate website, Comcast Executive Vice President David Cohen wrote about some of the comments being filed that "certain competitors and programmers appear to be attempting to use the transaction review process as an opportunity to seek advantages and concessions outside of marketplace negotiations. We believe these efforts should be rejected."
While the Writers Guild of America, West has come out in opposition to the deal and other guilds may follow their lead, the Directors Guild of America has sent a note of support to the FCC.
In a letter from executive director Jay Roth, the DGA told the FCC that Comcast will be a better owner for NBC than General Electric Co. was. Comcast, Roth wrote, has a commitment to "grow the industry, infuse new capital into the entertainment business and invest additional resources into programming," which will "represent a change from the uncertainty caused by many of the current owner’s past decisions concerning commitment to our industry, programming and jobs."
Monday is the deadline for comments to be filed with the FCC about the merger. Expected to weigh in with concerns about the deal is satellite broadcaster DirecTV. NBC's affiliate stations have indicated that they will support the deal with certain conditions.
Other big media companies including News Corp., Viacom and Time Warner have said they will not be filing comments about the deal to the FCC.
-- Joe Flint