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Comcast might buy stake in NBC Universal

COMPANY TOWN

The cable TV giant is said to be in talks with General Electric over its vast entertainment holdings.

October 01, 2009|Meg James and Joe Flint

The nation's largest cable television company, Comcast Corp., is in talks to buy a stake in entertainment giant NBC Universal, said people familiar with the situation.

Comcast has been looking to expand its entertainment offerings for several years. In NBC Universal it would get not only a big broadcast network and movie studio but also powerful cable channels including USA, Syfy, CNBC, MSNBC and Bravo.

NBC parent company General Electric Co. has repeatedly denied that it is interested in selling its vast entertainment holdings. However, the industrial giant is facing the possibility that in six weeks its minority investor, French telecommunications company Vivendi, might exercise an option to sell its 20% stake in NBC Universal. That would require GE to come up with $4 billion to pay Vivendi -- or find new investors to take Vivendi's place.

This wouldn't be the first time Comcast has made a play for a piece of Hollywood. Five years ago it made an unsuccessful run to buy Walt Disney Co. for $54 billion.

Taking an ownership interest in NBC Universal would cost much less. A recent report from J.P. Morgan said NBC Universal was worth $30 billion to $35 billion. A separate analysis by Sanford Bernstein & Co. valued it closer to $23 billion.

The appeal of selling part of NBC Universal instead of the whole unit is it could create a more favorable tax situation for GE, which bought NBC in 1986 for $6.5 billion.

Comcast and NBC Universal would not comment on the talks. Comcast did deny a report late Wednesday from industry website The Wrap, which said it had a deal to buy NBC Universal for $35 billion.

Vivendi said Wednesday that it would decide whether to exercise its option in November or early December.

For Comcast, getting some of NBC Universal would give the cable company programming assets to match its distribution clout. Comcast provides cable television to nearly 25 million homes.

Speaking at a recent investor conference, Comcast Chief Operating Officer Steve Burke said the company would like to own more cable networks.

"We wouldn't be doing our job if we didn't try to figure out a way to get bigger in those businesses," Burke said. He also cautioned, though, that that doesn't mean "doing a big $50-billion acquisition."

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meg.james@latimes.com

joe.flint@latimes.com

Times staff writers Dawn C. Chmielewski, Ben Fritz and Claudia Eller contributed to this report.

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