Comcast in talks to buy/spinoff NBC/NBC Universal

[SirFozzie]

Verrrrry interesting.. Is this the first step in making the networks kowtow to cable instead of vice versa?

http://www.cnbc.com/id/33123120

NBC Universal will be spun off from GE into a private company

2. Comcast will own 51% of NBCU and will be the managing partner (i.e. control). Comcast will have to contribute assets (i.e. the regional sports networks) and/or cash into NBCU.

3. GE will retain 49% equity interest in NBCU

4. Vivendi, which currently owns 20% equity interest in NBCU, will be out of the picture

[JonInMiddleGA]

Makes a little more sense for Comcast (and if you think NBC is poorly run now, just wait) when you remember that NBCu includes USA, Bravo, MSNBC, CNBC, Ion, Oxygen, and Syfy as well as The Weather Channel.

Here's another review (http://industry.bnet.com/media/10004401/risks-in-buying-nbc-universal-include-broken-peacock-network/)of the possible deal with quite a few financial details about the various pieces of the puzzle.

[RainMaker]

Was wondering if that would cause some massive anti-trust issues. I mean Comcast now can charge huge rates for those channels to competing companies, right?

[JonInMiddleGA]

Was wondering if that would cause some massive anti-trust issues. I mean Comcast now can charge huge rates for those channels to competing companies, right?

They could and probably will, but they wouldn't be doing anything that Time Warner wouldn't do if they bought them either and those are the two main suitors (although TW seems more interested in other assets than in the cable networks).

Truth is, there probably aren't all that many people lining up with cash available to buy them so there aren't exactly a whole lot of options for NBCu other than just bleeding to death.

[RainMaker]

How would NBCu bleed to death? They are still a profitible venture, although not as much as they used to be.

[dervack]

Great, add more channels that directv won't continue to carry.

[cuervo72]

Great, add more channels that directv won't continue to carry.

Yeah, I was wondering about that angle as well.

[gstelmack]

They could and probably will, but they wouldn't be doing anything that Time Warner wouldn't do if they bought them either and those are the two main suitors (although TW seems more interested in other assets than in the cable networks).

Didn't Time Warner and Time Warner Cable split into separate entities? That avoided some of the conflict of interest issues over things like HBO, etc.

[JonInMiddleGA]

How would NBCu bleed to death? They are still a profitible venture, although not as much as they used to be.

Maybe I should say that NBCu is a drag on GE, taking assets & focus away from their primary mission. And the cable elements can only carry the load for broadcast for so long as they head in different directions (and cable revenue growth is being outpaced by broadcast revenue decline) so the sooner they can split them the better.

Ultimately I'd say to look for NBC broadcast to either find an unexpected buyer or completely transformed into something else and cease to exist as a broadcast network (such as the plan that would split it into multiple subscription entities).

[JonInMiddleGA]

Didn't Time Warner and Time Warner Cable split into separate entities? That avoided some of the conflict of interest issues over things like HBO, etc.

I think you're right & I didn't think about that. From this side of the business I really don't deal with the separation of the two things that much and don't really think of them as particularly separate at all.

[stevew]

Is it that expensive, or futile for a cable type channel to transition to a broadcast type one? Is the licensing deal for a channel like USA that much per month from cable per subscriber that a move to digital OTA would be horrible?

[JonInMiddleGA]

Is it that expensive, or futile for a cable type channel to transition to a broadcast type one? Is the licensing deal for a channel like USA that much per month from cable per subscriber that a move to digital OTA would be horrible?

from an LA Times blog earlier today According to Kagan Media, an industry consulting firm, USA Network will have operating revenues of $1.4 billion this year and cash flow of $633 million. Its 55-cent per-subscriber fee is one of the highest for an entertainment network.

98 million households was the late November figure for USA, so that's $53.9 million per month or 646.8 million per year ... give or take a little ;)

edit to add: Sounds great really & it is on the high end for an entertainment network but starts to pale in comparison to the roughly $1 per HH that TNT gets and looks downright paltry next to ESPN which gets somewhere between $3.50 & $4.00 per HH.

double edit: Some interesting tables of fees by network from '97 to '07 are in a legal brief at http://www.copyright.gov/docs/section109/comments/joint-sports.pdf

[stevew]

Damn.

I guess Cable(dish for me) is one of those things where you look at the bill every month and hate to pay it. But you do because the alternative is worse(not having TV and sporting events).

If society was ever deconstructed by nuclear war, upon it's rebirth Cable TV would be one thing that would have to change. Obviously when we get to that point.

I mean, I can agree with the concept of watching a ton of advertisements on free to view over the air. But you get just as many with Cable.

I dunno.

[Jughead Spock]

I'm pretty sure Comcast would survive nuclear destruction, much like the cockroaches and Keith Richards.

[Greyroofoo]

Damn.

I guess Cable(dish for me) is one of those things where you look at the bill every month and hate to pay it. But you do because the alternative is worse(not having TV and sporting events).


I can't understand why people think they need to have cable tv. Haven't they ever heard of the internet?
I ditched cable about a year and have not regretted it one bit.

[cuervo72]

I can't understand why people think they need to have cable tv. Haven't they ever heard of the internet?
I ditched cable about a year and have not regretted it one bit.

I'm going to hook the internet up to the five tv's I have in my house, teach my kids how to access Nick, CN and Disney; teach my wife how to find and stream Headline News (or whatever that damned Nancy Grace is on), DiY, SyFy, HGTV, etc, and also how to store some of them for easy access later? Sure, I'll get right on that.

[JonInMiddleGA]

I'm going to hook the internet up to the five tv's I have in my house, teach my kids how to access Nick, CN and Disney; teach my wife how to find and stream Headline News (or whatever that damned Nancy Grace is on), DiY, SyFy, HGTV, etc, and also how to store some of them for easy access later? Sure, I'll get right on that.

Testify.

And afterward you can work on getting ESPN 360 to run smoothly instead of stuttering & routinely crashing.

[RainMaker]

I can't understand why people think they need to have cable tv. Haven't they ever heard of the internet?
I ditched cable about a year and have not regretted it one bit.
I can't give up cable because of sports. Too many of the local teams play on cable channels.

[SteveMax58]

Makes a little more sense for Comcast (and if you think NBC is poorly run now, just wait) when you remember that NBCu includes USA, Bravo, MSNBC, CNBC, Ion, Oxygen, and Syfy as well as The Weather Channel.

Jon, are you sure about the Weather Channel being part of NBCU? They are not listed as a member company for our contracts and affiliate info.

Or are they just owned by GE?

EDIT: Just looked into it...I guess they are. Odd that we do not engage them as a similar entity as NBCU.

[SteveMax58]

Yay for consolidation of media ownership!

Yeah...this isn't the last one we'll see.

[SteveMax58]

Didn't Time Warner and Time Warner Cable split into separate entities? That avoided some of the conflict of interest issues over things like HBO, etc.

Yes they did.

But keep in mind...Comcast owns E!, Style, Golf, Some Regional Sports Networks, and a handful of others. They also distribute and essentially operate for other networks as well.

Not really anything overly new here. Also worth noting that Cable Co's and Telco's have, and continue to have, mutual relationships for many things. Cable has used Telco infrastructure for phone & internet, Telco has used Cable for video content and access. Sometimes they have spats...but they have those with other Cable Co's and Telco's as well.

[JonInMiddleGA]

Jon, are you sure about the Weather Channel being part of NBCU? They are not listed as a member company for our contracts and affiliate info.

Or are they just owned by GE?

EDIT: Just looked into it...I guess they are. Odd that we do not engage them as a similar entity as NBCU.

There could be something out of the ordinary about how they handled them post-acquisition since it seems that they were at least equally interested in the TWC resources as a boost to the broadcast network entity as they were as a cable network. It's been treated differently by them from day one it seems to me, so that difference may be extending to other areas as well.