Although it’s been in the works for a couple of months, it’s been announced that the deal has been finalised and the US’ biggest cable TV provider, Comcast, will buy a 51% stake in NBC Universal from General Electric. The pact values the current NBC Uni at $30 billion, down from $42 billion when GE bought the company in 2003.
Despite the fact that the studio is worth less now than it was, Comcast will be adding its cable operations into the business, including stations like E!, which will make new company enormous (as well as Univeral Studios and NBC, NBC Uni also owns everything from the Sci-Fi Channel to Bravo). Added together the revenue they generated was $51 billion in 2008, which is more than Disney, Warner and News Corp (owners of Fox), making this new media conglomerate an absolute powerhouse.
The deal had been held up while GE neogtiatied with Vivendi to buy the 20% stake in NBC Universal that the French company still owned following its disastrous attempt to run the studio in the early 2000s. Once GE had bought that for $5.8 billion, the deal was signed with Comcast, which adds $7.25 billion in assets to the company (including Comcast’s stations and massive cable operation), as well as paying GE $6.5 billion in cash. It’s believed General Electric eventually wants to get out of the entertainment industry completely so it can concentrate on its core business, and will get rid of part of it remaining 49% stake in three and a half years time, when its first set of options kick in, with the rest going ater another three and a half years.
However it’s not all done and dusted yet, as creating such a huge entertainment company is expected to face tough regulatory reviews and claims that it’s anti-competitive. As a result, Comcast’s first payment isn’t due until until next September, with the final transcation closing sometime after that. Comcast and Universal are preparing to argue that the bigger company will he beneficial to comsumers, but considering the battles other media mergers have ignited, they may have a bit of a fight.
It’s certainly good news for Comcast, which has been trying to turn itself into one of the world’s biggest media companies for a while, and even tried to buy Disney in 2004.