updated 07:55 am EST, Thu December 3, 2009
Comcast has controlling stake, GE minority
Comcast today confirmed late rumors and bought a 51 percent stake in NBC Universal that gives it control of the studio. The deal sees GE maintain a 49 percent stake and receive about $6.5 billion from Comcast; NBC Universal in turn is borrowing $9.1 billion to pay GE. While the new combined company doesn't yet have a name, but Comcast has created a second division known as the Comcast Entertainment Group that will handle the content aspects of the venture.
French media firm Vivendi, which had previously had a 20 percent stake in NBC Universal, is selling its portion of the company for $5.8 billion with timing for most of the purchase dependent on whether or not regulators complete the deal by next September.
Comcast and NBC Universal expect the deal to immediately gain value as both are already consistently profitable. The acquisition doesn't have a definite close date and is highly contingent on regulatory approval, which includes not only checks against US antitrust laws but also the FCC and international agencies.
The effective merger has already drawn controversy as it risks creating a conflict of interest in digital video. NBC Universal has been heavily invested in services that have reduced Internet users' dependence on traditional cable TV, such as Hulu and providing content to online video services such as iTunes and the Zune Video Marketplace. Comcast meanwhile has preferred Internet video policies that leave customers dependent on its more lucrative cable TV service, such as the need for a cable subscription to use its upcoming On Demand Online service as well as instituting a 250GB bandwidth cap which, while relatively flexible, partly discourages frequent HD video downloads or streams.