Did you know that while we were reeling from the economy in 2008, Comcast made $34.3 billion? Their “take home” pay after all was said and done was $2.5 billion.
And in ’08 & ’09, when other companies were giving customers some slack in reduced prices or extended sales or what not, I don’t remember Comcast doing any such thing.
The deal with Comcast buying into NBC from GE (General Electric), taking a 51% ownership stake, they’ll be spending around $6.5 billion in cash and $7.25 billion in programming fees.
Elements Of The Purchase:
• NBCU will borrow ~ $9.1 billion and distribute it to GE.
• GE will get Vivendi’s 20% interest in NBCU for $5.8 billion when all is said and done if the plan pans out.
• Comcast will pay $6.5 billion to GE subject to various events before closing.
• GE expects to see approximately $8 billion in cash after paying down the NBCU debt and transaction fees.
• GE will be entitled to redeem one-half of its interest at year 3 ½ and its remaining interest at year 7. Comcast will have certain rights to purchase GE’s interest in the venture at specified times.
• To meet GE’s redemption requests, Comcast will provide a backstop up to a maximum of $2.875 billion for the first redemption and a total backstop of $5.750 billion.
Analysts say that Comcast buying into NBC is a move to protect themselves from dwindling cable TV subscribers as more customers head to the internet for their entertainment. But most of this deal involves networks. Not Interenet entities.
Comcast Is A Focused Business
Earlier I noted not recalling seeing any customer bonuses from Comcast. I mean face it, their primary goal would seem to be about the buck.
With all these networks being pulled under one corporate roof, I have to wonder when the corporate trimming (I mean reorganizing) begins and the web expansion begins.
This had me wondering about Hulu, but in an almost psychic move, Comcast said that Hulu will be business as usual, with the exception of some new content showing up there and at TV Everywhere. TV Everywhere is something that Comcast, Time Warner and a few other cable companies rolled out last summer to compete with Hulu.
Comcast WILL BE Making Bucks
As we pay for our subscriber cable services (That are riddled with ads), Comcast’s networks will be taking in advertiser dollars to support those very same networks we watch. They’re going to be double dipping! And the moment it isn’t profitable, I bet the business shears come out!
Will The Customer Reap Any Benefits From NBComcast-Uni?
Underneath all this, I’m wondering where NBC was financially falling short? I can’t say for sure, but heck what I was wondering was what, if any possible advantages could the consumer see from this joint venture?
One guess from industry analysts say that movies that come from Universal Studios could become available more readily through video on demand (VOD) services.
I’m thinking that this could mean we’d see things on VOD at the same time some projects hit the theaters, and I’m not talking about obscure Indie projects. In a humorous angle, if that were to happen, that would take some of the steam out of online piracy offenders who use the excuse of theater experiences or driving distances for why they steal from the internet. (Don’t worry… they’ve come up with other rationalizations to compensate.)
And with the surmised protective move to avert losing business to the internet, I can only guess that we will see content become available on the Internet just like On Demand on cable. It could be called Net-TV Demand, or On Inter-Demand Net! (There, I just coined some phrases before they did. Now they have to pay me if they use my idea!)
Despite this deal being sealed, it’s not closed. It will be able to close once this whole things gets FCC approval. I can’t imagine it won’t, but hey, I’ve been surprised before. But if they let XM and SIRIUS come together, I just don’t see this not happening.
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Check out the list of entities these two bring to the same table:
NBC:
- Bravo,
- CNBC,
- Hulu (Joint venture with Fox Entertainment Group, and ABC)
- iVillage,
- MSNBC cable TV,
- MSNBC.com,
- NBC News,
- NBC Universal Television Group,
- NBC,
- NBC.com,
- qubo,
- Syfy,
- Telemundo Television Studios,
- The Weather Channel,
- Universal Orlando Resort in Orlando, Florida
- Universal Studios Florida
- Universal Studios Hollywood in Universal City, California
- Universal Studios Japan in Osaka
- Universal’s Islands of Adventure
- USA Network,
- Wet ‘n Wild – Orlando
NBC Universal Global Networks include:
- 13th STREET,
- Studio Universal,
- Universal Channel,
- the international (non-U.S.) Hallmark Channels,
- Movies 24,
- Diva TV,
- KidsCo (joint venture).
Comcast:
- 25 million television subscribers in 39 of the 50 U.S. States
- 15 million Internet service customers
- 6.4 million telephone service accounts. (It’s the 3rd largest phone provider in the U.S..)
Additionally, Comcast either owns or partially owns:
- CN8,
- Comcast SportsNet,
- SportsNet New York,
- MLB Network Comcast Sports Southeast/Charter Sports Southeast,
- E! Entertainment,
- Style Network,
- G4,
- Versus,
- The Golf Channel,
- AZN Television, and
- FEARnet. <- One of my personal favorites!
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References: TV Guide Magazine, Business Week (1) (2), Boston.com, NBC-Uni, Wikipedia (1) (2), CNET, TV Everywhere, Wired
