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Cable companies, to this point, have mostly been bit players in providing content--the life-blood of the cable system. People won’t watch if you’ve nothing to show them. Comcast has just altered the landscape on content production, buying a majority share of NBC Universal, which it will now jointly run with General Electric (G.E.). Comcast’s entry price: $6.5 billion in cash and $7.25 billion in other value, for a total of $13.75 billion. (And you thought we were in a recession.)
Comcast, which has been jonesing for this deal for more than a year, said in an announcement, the deal is “a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding.” The deal between G.E. and Comcast was completed weeks ago, but held up by G.E.’s having to buy out Vivendi, which owned a 20 percent stake in NBC. Vivendi will get $5.8 billon for its share.
Benefits of the deal revolve around NBC having valuable content, such as CNBC, MSNBC, Bravo, USA, and SyFy channels, and Comcast having the means of delivering that content via cable, Internet, and mobile platforms to over 45 million subscribers. Because Comcast is already deriving fees from subscribers, it could well mean that online content from NBC Universal will become readily available, at least within the Comcast system.
This is only the first stage, however. The deal has to past the muster of the Federal Communications Commission, Federal Trade Commission, and the Justice Department’s antitrust division. Could be another year before the deal is finalized.
Image Credit: Comcast, NBC Universal