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A Deal for NBC Could Be Comcastic

By Tom Shales
Washington Post Staff Writer
Friday, October 16, 2009

What's being billed as one of the biggest media deals in years could also be seen as rescue mission -- liberating NBC from the clutches of its fumbling management and from General Electric, the hardhearted defense contractor that bought the network in 1986 and has been ordering budget cuts ever since.

The company is called NBC Universal now, because it includes the Universal movie studio, and is said to be worth $35 billion, vs. the $6.5 billion or so that GE paid (for NBC alone). The potential buyer is Comcast, the largest cable company in the United States, and a firm whose principal interest is television, with no sideline ventures into toaster ovens, jet engines or nuclear power plants.

Well-informed insiders say that it's too early to call the deal a fait accompli but that it's just one notch shy. If it happens, as is likely, it won't be in the next eight days but in the next 30, a Thanksgiving present to NBC employees and the viewing public.

Among the first items of business might be the undoing of another deal: the pact NBC made with Jay Leno, giving him the last hour of prime time Monday through Friday all year. So far, "The Jay Leno Show" has been a ratings weakling with a strong negative effect on the rest of the NBC prime-time schedule.

Not only did serious dramas vanish from the 10 o'clock slot, but there are also reports that the Leno camp has objected to anything too "depressing" in the 9 o'clock slot, which practically eliminates all opportunities for serious dramatic television on NBC. Viewership is low on all networks on Saturday nights, and NBC airs football games on Sundays.

In Hollywood, producers are reportedly furious with NBC for caving in to Leno. They haven't been talking on the record for fear of eliminating NBC as a potential customer altogether. They would love to see Leno go away.

The Leno contract is complicated, and it's unlikely a change could be effected immediately. If Leno makes it through the season, however, it would almost certainly be his last at 10.

Comcast is expected to put money into NBC to develop programming, not just ask for more cost-cutting as the current owner reportedly does. Comcast will likely explore innovations rather than just trying to survive, since Comcast has been in the television business since it began. Its executives know more about the changing terrain of American telecommunications.

Comcast might even make quality programming a priority instead of looking at TV shows only as units of "product" to bring in revenue.

In recent years, Comcast has moved heavily into the Internet business, with 17 million subscribers, more than any other company, and it could be counted on to experiment with new links between the TV side and the Internet. Comcast cable subscribers could expect many more possibilities from video on demand, with perhaps the entire NBC schedule available for time-shifting. They could even watch Leno at 11:30 p.m., his time slot when host of "The Tonight Show."

Surprisingly, perhaps, Comcast's main interest in going after NBCU, an inside source says, is the handsome array of moneymaking cable networks that NBC has developed: not only CNBC and MSNBC but also Bravo, Syfy, USA Network and other specialty operations. In the second quarter, NBC's broadcast revenue was down 9 percent but its cable revenue was up 3 percent (and cable profits up 7 percent). Thus Comcast's chief interest.

In industry trade papers, there's been considerable speculation about whether Jeff Zucker, the unpopular and currently unsuccessful chief executive of NBC Universal, would lose his job once the deal goes through. Zucker is considered an architect of failure, widely blamed for the disastrous showing NBC has made in the ratings this season and for low morale at many levels within the network.

But he might not have to start cleaning out his office just yet, insiders say. Comcast is more likely, some speculate, to keep Zucker and his team in place as a way of helping to make the transition smooth. Comcast is a conservatively run company, yes, but who's more conservative than GE?

Comcast has been searching for a "content company" to buy or merge with for a long time, as is commonly known in the business. Five years ago, Comcast made a run at Walt Disney, a deal that would have been worth $54 billion or more -- if it hadn't fallen through at the last minute.

The Comcast-NBCU deal could very well fall through, too. And viewers might feel the urge to say, "So what?" -- why root for one giant corporation against another? In this case, there's at least a marginal and perhaps a substantial difference. If Comcast buys NBC, one part of television might actually get better.

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