Monday, January 31, 2011
Comcast Takes Over NBC Universal
I never would have thought, coming from a small town in Ohio (Copley) that one day I would be able to say that I've worked for both Fox and NBC. Well, technically I work for Comcast, but you know what I mean. Anyways, congrats to Comcast!
Comcast, the nation’s largest cable TV company, took control of NBC Universal late on Friday, making it the first cable company to own a major broadcast network. Ha! 30 Rock is now owned by Center City!
The takeover gave the cable distributor a 51 percent control of NBC Universal, which owns the nation’s fourth-ranked broadcaster, NBC; the Universal Pictures movie studio and related theme parks; and a bevy of cable channels including Bravo, E and USA.
The deal had raised fears that Comcast might abuse its control of NBC Universal to favor the 23 million who rely on it for cable TV service and the 17 million who pay for Internet connections.
But the Justice Department and the Federal Communications Commission forced Comcast to make the full suite of NBC Universal content available as a single package to online competitors on terms comparable to those reached with more established rivals, like Dish Network and DirecTV.
NBC Universal is also expected to match new deals for smaller chunks of programming between other media firms and online video providers if it has comparable programming on hand. As an example, NBC Universal might have to make “The Real Housewives of New York City” from Bravo available to Netflix if Viacom makes a similar deal for “Jersey Shore,” the MTV show.
The company also had to give up the decision-making power associated with its 32 percent share of Hulu, the online video service it co-owns with the Walt Disney Company, the News Corporation and Providence Equity Partners. Hulu is one of the services that makes viewing shows like “30 Rock” possible online.
The rules highlight the new battleground for entertainment in the home between traditional power players like Comcast, which has lost subscribers in the economic downturn, and companies like Netflix, which added them with its cheap service and compatibility with a range of devices.
In the deal, Comcast paid General Electric just under $6.2 billion in cash and contributed its pay TV channels like E Entertainment Television and the Golf Channel, worth $7.25 billion, to NBC Universal.
G.E.’s stake in NBC Universal fell to 49 percent from 80 percent, but G.E. plans to diminish that to zero by being paid out from the venture over about seven years. This week, G.E. bought out the 20 percent stake held by Vivendi of France for $5.8 billion in order to complete the deal.