Cable-TV giant Comcast Corp. is in preliminary talks to take a 20 percent to 50 percent stake in NBC Universal – owner of NBC Channel 30 in West Hartford — and increase its ownership of the TV shows and movies it distributes to its cable subscribers, according to the Associated Press.
Fairfield-based General Electric Co., which owns 80 percent of NBC Universal, has been in talks with multiple parties, including Comcast, to unload part of the entertainment unit, according to people familiar with the negotiations. These people described the talks to The Associated Press on condition of anonymity, confirming other reports, because the talks are still early.
A 50 percent stake in NBC Universal could cost at least $10 billion.
Investors were already showing displeasure, knocking Comcast shares down more than 6 percent this afternoon.
One key element is whether French conglomerate Vivendi SA decides to sell its 20 percent stake in NBC Universal. It has an annual window from Nov. 15 to Dec. 10 to unload the holdings, and its CEO has called the stake “non-core.”
If Vivendi, thought to be eyeing an investment in telecommunications, does sell, GE would have several options. GE could buy Vivendi’s 20 percent itself, sell the Vivendi stake in an initial public offering or to a third party, or put the entire division on the block.
Comcast, the nation’s largest cable TV provider and the largest in Connecticut, could purchase Vivendi’s 20 percent stake alone or take part of GE’s holdings as well for a total 50 percent stake in NBC Universal. It is seen as unlikely that GE will sell NBC Universal entirely, since the unit generates cash.
GE needs the money. GE has spent much of the past year focused on the struggles of its giant GE Capital finance unit, which has posted big losses, forcing GE to inject cash into the unit and raise money from outside sources.
NBC Universal has also suffered during the financial crisis, with a sharp decline in advertising revenue. The NBC network also is in fourth place in the ratings, which spurred its decision to move Jay Leno into prime time. Meanwhile, Universal Pictures has seen mixed box office results, and attendance at Universal theme parks is down.
The division’s profits were off by 41 percent in the second quarter.
NBC Universal also owns the Telemundo network and such cable channels as Bravo, USA Network and CNBC, which Comcast pays to show to its subscribers. (AP)
