After months of wrangling, the deal is done: cable operator Comcast is buying a 51 percent controlling stake in NBC Universal for $13.75 billion, putting the United States’ largest cable operator in control of one of the most recognized broadcast, cable, and movie operations on the planet. The deal gives Comcast control not only of the NBC broadcast network, but also includes the company’s numerous cable properties (like Bravo, USA, Syfy, and The Weather Channel), along with the Spanish-language Telemundo network as well as Universal movie studio and theme parks.
The deal will have Comcast givine General Electric about $6.5 billion in cash, as well as contributing its own cable networks (like E! and The Golf Channel, plus numerous regional sports networks) and digital media properties to NBC Universal. Comcast’s assets are values at $7.25 billion.
If the deal is approved by industry regulators, Comcast will become a media conglomerate on the scale of Walt Disney Company…which, ironically, was Comcast CEO Brian Roberts’ first preference for a takeover.
“Today’s announced transaction will increase our capabilities in content and cable networks,” said Comcast CEO Brian Roberts, in a statement. “At the same time, it will enhance consumer choice and accelerate the development of new digital products and services.”
The new joint venture has Comcast attempting to meld content distribution—its cable and Internet operations—with content creation. Time Warner tried unsuccessfully to build a similar empire beginning in the mid-1990s, combining movie, television, and publishing operations with a cable and Internet operations. That didn’t work out so well: Time Warner is now in the final stages of spinning AOL out of its corporate framework, and recently spun its cable operations off into a separate company. However, the media landscape has changes since Time-Warner’s efforts to create an integrated media empire. Comcast sees its main competitors being satellite, mobile, and online content providers; by acquiring media creation assets, Comcast’s services gain a competitive edge in exclusive content.
Comcast has pledged it will maintain NBC’s network of over-the-air broadcast stations—even though the broadcast business model is struggling to retain advertising revenue—as well as improve public interest programming. The company also says it will give free reign to NBC News, and not let Comcast’s business interests interfere with the news bureau’s coverage.
The deal could mean that films from Universal Studios get to Comcast customers and NBC properties faster than they did in the past; however, the deal may also means that costs go up for cable and satellite subscribers on other providers, since Comcast will not doubt be tempted to charge its competitors top dollar for NBC Universal movies and shows—and those costs would be directly passed to consumers on those other services.
The deal is expected to close within a year, pending regulatory approval. Although approval is widely expected, the Obama administration has voiced a tough stance in regard to media consolidation.