General Electric Co. Chief Executive Jeffrey Immelt, sounding less committed to the entertainment business, said Friday that his company was getting its peacocks in a row for a possible change in ownership at NBC Universal.
The industrial giant has mostly kept quiet about plans to sell part of its stake in NBC Universal as its broadcast TV and movie studio have faltered amid an advertising recession, its programming has missed at the network, and a string of costly box-office duds has prompted the ouster of two top film executives.
GE has been in negotiations with Comcast Corp. about forming a joint venture in which it would own 49% of NBC Universal and the cable TV operator would control 51%. And for the first time Friday, media titans Rupert Murdoch and John Malone expressed interest in the entertainment company.
Immelt, who this month acknowledged that GE was mulling over its options about NBC Universal, said in a conference call with financial analysts that GE was making preparations in the event that its current partner, French telecommunications firm Vivendi, decides to sell its 20% stake.
Each year, Vivendi has a three-week window during which it can exercise its option to divest. The window opens Nov. 15.
"This year, we just wanted to be ready for several scenarios. One might be an IPO or another strategic partnership like the one we have had actually with Vivendi," Immelt said.
GE has the right to buy Vivendi's stake, but Immelt seems unwilling. To do that, the company would have to come up with billions of dollars in cash at a difficult time. GE has been laboring for the last year to clean up after the markets meltdown, which walloped its capital finance and real estate businesses.
Underscoring how it has been hammered by the recession, the Fairfield, Conn., conglomerate Friday reported a 45% drop in net income to $2.5 billion for the quarter ended Sept. 30. Revenue fell 20% to $37.8 billion. GE shares closed down 71 cents at $16.08 after the weak earnings report.
For years, Immelt has faced criticism from investors who have questioned the need for GE to hold on to NBC Universal when heavy manufacturing industries such as jet engines, wind turbines, train locomotives, water systems and medical imaging equipment dominate the company's business.
