Comcast and NBC Universal to form media superpower

By MARTINA LEES
Updated:


America’s biggest cable television company Comcast has agreed to buy a majority stake in NBC Universal, creating a $37billion media superpower.

Comcast, which already serves a quarter of all US homes that pay for television, will now also control the NBC broadcast network, more than 20 television channels as well as Universal’s movie studio and theme parks.

King Kong, a Universal film

King Kong: Comcast would in itself become a behemoth if the deal to buy NCB Universal went through


The firm will buy a 51 per cent stake from General Electric (GE) in a deal worth $13.75billion (£8.3billion).

But consumer groups fear that the takeover would give Comcast too much control over entertainment.

If the deal clears all hurdles, Comcast’s influence will rival that of The Walt Disney Company - which it has already tried to buy for $54billion in 2004.

It could achieve what Time Warner failed to do with AOL, merging entertainment content with its delivery.

This could bring movies to cable more quickly and deliver more television shows to mobile phones and other devices.

GE, which has held an 80 per cent stake NBC Universal since 1986, wants to refocus on its core-business after it ran up losses in its GE Capital arm last year.

The industrial conglomerate would keep a 49 per cent interest in the new venture.

The French media giant Vivendi SA, which has owned the other 20 per cent, yesterday agreed to sell it to Comcast.

Comcast, which faces threats from online video and phone companies that offer cheap all-in-one deals, wants to move away from cable services to providing on-demand video.

To do so, it wants to beef up its content with NBCU’s television channels. These include USA, Syfy and The Weather Channel.

NBCU also owns the Spanish-language Telemundo and an array of regional sports networks.

Comcast chairman and chief executive Brian Roberts said the deal would allow the firm to become a leader in ‘anytime, anywhere’ media.

But his shareholders were less happy. They fear Comcast, like Time Warner, will bite off more than it can chew.

Shares in Comcast have fallen 11 percent, wiping out about $5billion in market value, since the first whiff of the deal two months ago.

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