Principals Mum About Report of Comcast Deal to Buy NBC Universal
Thursday, October 1, 2009
NBC Universal executives declined to deny a report Wednesday night that Comcast, the cable giant, is in talks to buy the television and movie company from General Electric.
Comcast also did not deny the report that bankers for the two sides discussed a possible deal Tuesday in New York.
Such talks often lead nowhere, but rumors have circulated for months that GE might be looking to unload the news and entertainment company. NBC is stuck in fourth place among broadcast networks, and Universal Studios is enduring a rough movie season.
"We have no comment," NBC Executive Vice President Allison Gollust said.
Comcast spokeswoman D'Arcy Rudnay also would not address the reported talks. "While we don't comment on M&A [mergers and acquisitions] rumors, the report that Comcast has a deal to purchase NBC Universal is inaccurate," Rudnay told Bloomberg News.
That, however, was not what was reported by TheWrap.com, a Hollywood-based Web site founded by former Washington Post and New York Times reporter Sharon Waxman. That account cited sources who have knowledge of the talks.
Waxman noted that Comcast has a greater market value, at $48.4 billion, than NBC Universal, which has fallen to an estimated $35 billion in value, from about $55 billion a year ago. Comcast also held nearly $4 billion in cash at the end of the second quarter.
Recent reports indicate that Vivendi, a minority stakeholder in NBC, is preparing to sell its 20 percent share of the company, which would make it easier for GE to sell the network.
TheWrap's report comes as merger talks on Wall Street have heated up in recent weeks, after nearly coming to a standstill amid the global financial crisis.
If the reported discussions lead to a sale, it will give Comcast an enormous amount of content for its distribution pipeline. The takeover also would mean a new owner for NBC News, MSNBC and CNBC, as well as the Spanish-language Telemundo network and USA and Bravo cable channels. In 2004, Comcast tried to buy the Walt Disney Co., which owns ABC, but eventually withdrew its unsolicited, $56 billion bid.
General Electric acquired NBC in 1986, when it bought the network's parent, RCA Corp., for $6.28 billion. It added Telemundo in 2002 for nearly $2 billion, and Universal in 2004 in a $5.4 billion purchase.
This past March, GE announced that it was slashing its dividend in a move intended to save as much as $9 billion a year -- its first dividend cut since 1938.