Comcast to take over NBC Universal at midnight

Jan 28, 2011 By RYAN NAKASHIMA , AP Business Writer
In this Aug. 21, 2009 file photo, the NBC logo glows in neon lights at its headquarters in New York. Comcast, the nation's largest cable TV company, says it will complete its takeover of NBC Universal at just before midnight Eastern time, Friday, Jan. 28, 2011. The deal will give Comcast Corp. 51 percent of the fourth-ranked broadcaster NBC, a bevy of cable channels and the Universal Pictures movie studio. It caps a yearlong regulatory review that resulted in conditions meant to keep it from stifling the growth of online video services such as Netflix and Hulu. (AP Photo/Bebeto Matthews, File)

(AP) -- The nation's largest cable TV company, Comcast Corp., was set to take control of NBC Universal on Friday after the government shackled its behavior in the coming years to protect online video services such as Netflix and Hulu.

The deal's closing was to occur shortly before midnight EST Friday, Comcast spokesman John Demming said.

The takeover gives the cable-hookup company 51 percent control of NBC Universal, which owns the nation's fourth-ranked broadcaster, NBC; the Universal Pictures movie studio and related theme parks; and a bevy of cable channels including Bravo, E! and USA.

The combination had raised fears that Comcast might abuse its control of NBC Universal to favor its most valuable customers: the 23 million who rely on it for cable TV service and the 17 million who pay for Internet connections.

But the Justice Department and Federal Communications Commission imposed conditions that prevent Comcast from keeping to itself NBC Universal's popular shows such as "The Office" and movies including "Despicable Me" for the next several years.

NBC's "30 Rock" on Thursday night spoofed Comcast's impending takeover from General Electric Co. As a clock bell sounded, a neon "GE" atop an office building fizzled out and was replaced by a "K" inside a swoosh resembling Comcast's logo.

"Wow, out with GE, in with Kabletown," said Tina Fey's character, Liz Lemon. "Seems like one of us should sing 'The Circle Game' right now."

Conditions imposed on Comcast were serious, though.

Regulators forced Comcast to make the full suite of NBC Universal content available as a single package to online competitors on terms comparable to those reached with more established rivals such as Dish Network Corp. and DirecTV.

NBC Universal is also expected to match new deals for smaller chunks of programming between other media firms and online video providers if it has comparable programming on hand. As an example, NBC Universal might have to make the Bravo channel's "The Real Housewives of New York City" available to Netflix Inc. if Viacom Inc. cuts a similar deal for "Jersey Shore."

The company also had to give up the decision-making power associated with its 32 percent share of Hulu, the online video service it co-owns with Disney, News Corp. and Providence Equity Partners. Hulu is one of the services that makes viewing "30 Rock" possible online.

The rules highlight the new battleground for entertainment in the home between traditional power players such as Comcast, which has lost subscribers in the economic downturn, and companies such as Netflix, which added them with its cheap service and compatibility with a range of devices. Netflix ended the year with 20 million customers after adding 3.1 million during the fourth quarter, by far the most during any three-month period since its service launched in 1999.

In the deal, Comcast was to pay General Electric about $6.5 billion in cash and contribute its pay TV channels such as E! Entertainment Television and The Golf Channel, worth $7.25 billion, to NBC Universal.

GE's stake in NBC Universal was to drop to 49 percent from 80 percent, but GE plans to diminish that to zero by being paid out from the venture over about seven years. Earlier this week, GE bought out the 20 percent stake held by France's Vivendi SA for $5.8 billion in order to complete the deal.

As part of Comcast's takeover, NBC Universal changed its corporate logo to NBCUniversal - without the space, the peacock or the globe silhouette. Officially, the company's name is still NBC Universal, but the space-less design is meant to represent the unity of its two main divisions.

Ahead of a town hall meeting with their new corporate bosses on Thursday, some 25,000 NBC Universal employees each received a certificate for 25 Comcast shares, worth $22.84 each on Friday; a family pass to one of the Universal theme parks; and other materials, including a "Big Idea Book" in which they were to record their own.

Explore further: Denmark is world's most connected country

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Comcast, NBC to sell 1 TV station in Los Angeles

May 10, 2010

(AP) -- NBC Universal will sell one of the three Los Angeles stations it owns as cable TV provider Comcast Corp. tries to clear regulatory hurdles so it can acquire a controlling stake in the entertainment company.

Comcast exploring stake in NBC

Oct 01, 2009

(AP) -- Comcast Corp. is in negotiations to buy 20 percent to 50 percent of NBC Universal, according to people familiar with the negotiations.

FCC chairman seeks conditions on Comcast, NBC deal

Dec 23, 2010

(AP) -- The head of the Federal Communications Commission proposed regulatory conditions Thursday to ensure that cable giant Comcast Corp. cannot stifle video competition once it takes control of NBC Universal.

FCC seeks more info from Comcast, NBC Universal

Oct 04, 2010

(AP) -- The Federal Communications Commission is requesting additional information from Comcast Corp. and NBC Universal as it reviews the cable operator's plan to acquire a controlling stake in the media company.

GE, Vivendi deal paves way for NBC sale to Comcast

Dec 01, 2009

(AP) -- General Electric Co.'s agreement to buy out the rest of NBC Universal paves the way for it to sell control of the TV and movie company to Comcast Corp. in a deal that promises to reshape the entertainment ...

Recommended for you

BlackBerry courts iPhone users with cash

7 hours ago

Canadian smartphone maker BlackBerry is wooing Apple customers with a cash offer for trade-ins of iPhones for its new square-screened, keyboard-equipped Passport.

HP earnings show continued struggle

8 hours ago

Venerable tech giant Hewlett-Packard has been struggling for three years to turn its business around. Its latest earnings show it still has more work ahead.

UN moves to strengthen digital privacy (Update)

9 hours ago

The United Nations on Tuesday adopted a resolution on protecting digital privacy that for the first time urged governments to offer redress to citizens targeted by mass surveillance.

Spotify turns up volume as losses fall

9 hours ago

The world's biggest music streaming service, Spotify, announced Tuesday its revenue grew by 74 percent in 2013 while net losses shrank by one third, in a year of spectacular expansion.

Are electric cars greener? Depends on where you live

9 hours ago

Long thought a thing of the future, electric cars are becoming mainstream. Sales in the United States of plug-in, electric vehicles nearly doubled last year. Credible forecasts see the number rising within ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.