Comcast agrees to buy control of NBC

$30 billion deal with GE fulfills longtime ambition for Comcast chief Roberts

December 04, 2009|By Meg James and Joe Flint | Tribune Newspapers

In a momentous shift in the balance of power of the entertainment industry, cable television giant Comcast Corp. reached a deal to acquire control of NBC Universal from General Electric Co.

The proposed $30 billion transaction is the fruition of a longtime ambition by Comcast's chief executive, Brian Roberts, to recast his family-controlled Philadelphia company into a leading producer of movies and TV shows and a purveyor of prominent cable and broadcast networks, including NBC.

Under terms of the deal made in a long-awaited announcement Thursday, Comcast will contribute its entertainment channels, nine regional sports networks and about $6.5 billion in cash in exchange for 51 percent of the new venture, which will continue to be called NBC Universal for now.

GE will reduce its ownership in the company to 49 percent. The deal grants Comcast the right to buy out GE's interest within eight years. GE placed a value of $30 billion on NBC Universal. Comcast said the entertainment assets that it was contributing to the joint venture were worth $7.25 billion.

If the deal wins regulatory approval, the new Comcast-controlled NBC Universal will be one of the largest entertainment companies in the world, with assets spanning the NBC broadcast network; more than a dozen cable channels, including USA Network, Syfy, Bravo and Style; nine regional sports channels; the Universal Pictures film studio; Universal Studios theme parks; Spanish-language network Telemundo; more than two dozen TV stations; and a stake in the online video Web site Hulu.

The deal is expected to undergo a lengthy review, lasting perhaps a year or longer, before the two companies are allowed to combine. Advocacy groups and rival media companies are lining up to protest the grip on programming that the new company would have on television and the Internet.

Comcast would own one out of every seven TV channels, provoking concerns about media concentration.

In addition to the Federal Communications Commission, the deal also must be reviewed by the Department of Justice or the Federal Trade Commission. Congress also will weigh in.

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