G.E. Agrees to Sell NBC to Comcast in $30 Billion Deal

Pubished: December 3, 2009

After nearly eight months of negotiations, Comcast, the nation’s largest cable operator, finally reached an agreement on Thursday to acquire the television network, NBC Universal, from the General Electric Company in a $30 billion deal.

The deal, which has been known for months, was announced Thursday morning. Almost immediately, the transaction reshapes the nation’s entertainment industry even as it raises the sector’s anxieties about the future. In a statement, Brian Roberts, the chief executive of Comcast, called the deal “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’s genesis lies in frequent flirtations over the last several years between Comcast and General Electric, although serious talks began in March. For Comcast, the purchase is the realization of its long-held ambition to be a major producer of television shows and movies.News of the negotiations broke in late September, and in the ensuing weeks, G.E. worked to resolve details with Comcast, while simultaneously negotiating to buy out a 20 percent stake in NBC Universal held by Vivendi, the French telecommunications conglomerate. It was this last part that proved difficult. G.E. and Comcast’s part of the transaction has essentially been complete for weeks, but the final step was held up by the negotiations between G.E. and Vivendi. Vivendi will receive about $5.8 billion for its stake. The deal will create a joint venture, with Comcast owning 51 percent and G.E. owning 49 percent.

Comcast will contribute its stable of cable channels, which includes Versus, the Golf Channel and E Entertainment, worth some $7.25 billion, and about $6.5 billion in cash. For now, the network will remain NBC Universal, but ultimately Comcast could decide to change the name.  Jeff Zucker, the current head of NBC, will stay on as chief executive and would report to the chief executive of Comcast, Steve Burke. In a statement released by the companies Monday morning, Mr. Zucker called the deal the “start of a new era” for NBC.  The deal could take up to 18 months to pass regulatory muster.
Most of NBC’s value is in its lucrative cable channels — USA, Bravo, SyFy, CNBC and MSNBC. The NBC network and Universal Studios will only comprise a small portion of the joint venture’s cash flow.
In some respects, G.E.’s decision to sell reflects the deteriorating state of the broadcast television industry, and a desire to exit a business that never quite fit well with its industrial side.



NBC has been mired in fourth place among the major broadcast networks, and overall the economics of the broadcast television business has deteriorated in recent years amid declining ratings and an advertising recession. By contrast, cable channels have continued to thrive because they rely on a steady stream of subscriber fees from cable companies, such as Comcast.



Comcast, whose chief executive is Brian L. Roberts, failed in 2004 with a hostile takeover bid for the Walt Disney Company. Since then, the company has taken a less ambitious approach to content, buying a stake in MGM and building up smaller cable channels and regional sports networks.
Shortly after news of the deal leaked in September, G.E. and Comcast signed a standstill agreement, which effectively blocked other bidders from entering the fray. Previously, G.E. had sought to entice interest on the part of Time Warner, and more recently Rupert Murdoch, who controls the News Corporation, considered making an offer for NBC Universal.