Comcast buys major interest in NBC

12/4/2009

PHILADELPHIA - Comcast Corp. announced yesterday it plans to buy a majority stake in NBC Universal for $13.75 billion, giving the nation's largest cable TV operator control of the Peacock network, an array of cable channels, and a major movie studio.

Although the deal could mean that movies could reach cable more quickly after showing in theaters, and that TV shows could appear faster on cell phones and other devices, it was raising concerns that Comcast would wield too much power over entertainment.

Indeed, if the deal clears regulatory and other hurdles, Comcast would rival the heft of the Walt Disney Co. - which Comcast CEO Brian Roberts tried to buy.

The deal is expected to take nine months to a year to be finalized, assuming regulators OK it. Comcast, a memo shows, will tell U.S. regulators weighing the deal that it will increase local and children's programming and offer rivals access to NBC broadcast stations on fair terms.

Comcast, which serves a quarter of all U.S. households that pay for TV, would gain control of the NBC broadcast network, the Spanish-language Telemundo, and about two dozen cable channels, including USA, Bravo, and Syfy. It also would have regional sports networks, Universal Pictures, and theme parks.

The deal is a major turning point for Comcast, catapulting the Philadelphia company into a media conglomerate and above the pack of cable operators that remain content to run their regional cable systems.

"Does the world ever stand still?" Mr. Roberts asked. Bringing NBC Universal into the Comcast family is "pro-consumer" and would allow the company to more quickly deliver "what consumers want, which is access to all different types of content on different platforms and different times."

In agreeing to buy 51 percent of NBC Universal from General Electric Co., which has controlled NBC since 1986, Comcast hopes to succeed in marrying distribution and content in a way Time Warner Inc. could not. AOL and Time Warner are undoing their ill-fated marriage Dec. 9. Time Warner has shed its cable TV operations.

Comcast's Roberts and GE CEO Jeff Immelt have been discussing the deal for months, and the final weeks came down to GE's persuading French conglomerate Vivendi SA to first sell its minority stake.

Comcast made the deal because it is eager to diversify its holdings. It faces encroaching threats from online video and aggressive competition from satellite and phone companies that offer subscription TV services.

For entertainment viewers, the deal means Universal Pictures movies could get to cable faster.

Comcast also said it would maintain free, over-the-air TV on NBC stations - a business model that is eroding because of falling advertising revenue. Comcast also pledged to improve public-interest programming. And it said it would not let its business interests affect NBC News.

But consumer advocates and even other cable operators worry about the deal, saying people could end up paying more for TV.

Comcast wants the company largely for its cable channels, which, combined with Comcast's, are expected to provide about 80 percent of the new venture's profit.