Could Comcast Be The Next Majority Holder of NBC Universal?

October 2, 2009 – 10:00 am – No Comment

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The largest (and arguably the most hated) cable network in the United States wants to buy a 50% stake in NBC Universal from General Electric. Talks have been going on for at least two months between the to companies.

Currently, it’s all resting on the shoulders of Vivendi SA and its decision to sell its 20% stake in the company.

NBC Universal is currently held by 80% General Electric and 20% Vivendi SA. NBC Universal doesn’t only run the NBC network, but it also runs a films studio, cable channels USA, CNBC, MSNBC, as well as Bravo.

So, where is Comcast getting the money for the acquisition if it is, indeed, going through? Well, thanks to the credit markets finally thawing out a bit, companies (Comcast included) have been able to raise some money through the sale of company debt. It currently has $4 billion in cash.

But, how much is NBC worth? Stephen Tusa, an analyst for JPMorgan Chase, estimated the value of NBC Universal to be between $30 and $35 billion. That was on September 8th.

The merger between the two companies could mean better things for Comcast subscribers, but that is completely and totally unlikely. For the reason that cable companies have no reason to have to be competitive with pricing, Comcast will continue to charge whatever they want for the content that they are giving to their customers even if they are getting that content at a reduced price (because they own most of the company). If the purchase does happen (and GE DOES have the right of first refusal so perhaps GE will actually take the 20% from Vivendi?) then Comcast will surely use any operating profits to pad its own bottom line and not actually cut the rates they charge any of their customers.

Comcast is known for really messing over their customers. You can find angry comments about the company all across the internet. I have not been fortunate enough to have another cable provider in my city, however, I will say that the company I have to have cable through isn’t exactly wonderful either.

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