Comcast Buys Rest Of NBCU For $16.7B

Comcast said Tuesday that it's buying the remaining 49% of NBCUniversal from General Electric for $16.7 billion, doing so several years early. Investors thought the move was good for both companies — GE because it got cash for its stake earlier than expected and Comcast because it is seen to be a good use of its cash. Comcast's decision to buy the rest of NBCU ahead of schedule represents a resounding vote of confidence in the future of TV, even as the growth of Internet video reshapes the entertainment landscape.
By
Associated Press,

LOS ANGELES (AP) — Comcast said Tuesday that it's buying the rest of NBCUniversal from General Electric for $16.7 billion, doing so several years early as the cable TV provider takes advantage of low borrowing costs and what CEO Brian Roberts called a "very attractive price."

At the same time, Comcast Corp. raised its annual dividend 20 percent to 78 cents per share and vowed to buy back $2 billion in shares this year. It is also buying NBCUniversal's headquarters at 30 Rockefeller Plaza in New York and the CNBC headquarters in Englewood Cliffs, N.J., for another $1.4 billion.

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Investors thought the move was good for both companies — GE because it got cash for its stake earlier than expected and Comcast because it will benefit more from the rising price of rights to sports and other TV programs. With the NBCUniversal businesses, Comcast avoids solely being in the uncomfortable position of passing those costs onto consumers.

Comcast's stock jumped $2.53, or 6.4 percent, to $41.46 in after-hours trading, following the announcement. GE shares rose 81 cents, or 3.6 percent, to $23.39.

Comcast's decision to buy the remaining half of NBCUniversal ahead of schedule represents a resounding vote of confidence in the future of TV, even as the growth of Internet video reshapes the entertainment landscape.

The decision was driven largely by Comcast Corp. (CMCSK)'s belief that it would end up paying substantially more for General Electric Co. (GE)'s remaining 49 percent stake if it had waited until 2018, as had been envisioned in 2011 when the cable TV provider acquired majority control of NBCUniversal.

Brand Connections

The flagship NBC network, once seen as the deal's albatross, has been on the turnaround. Broadcast TV revenue rose 7 percent last year, even after excluding the Super Bowl and the Olympics. Theme parks, the Universal Pictures movie studio and pay TV networks such as USA and SyFy have grown, too.

As the advertising market has rebounded with the economy, so have the fortunes of NBCUniversal and other media companies such as CBS Corp. and ABC owner The Walt Disney Co. (DIS) That made the latest transaction, announced Tuesday, seem like a savvy one at a relatively modest price.

"I think the television business has turned out to be much more powerful as an advertising medium than people were thinking five years ago," said Jonathan Taplin, a professor specializing in digital media at the University of Southern California. "Comcast made a really smart move in believing that TV would continue to be a really important part of the advertising picture for years to come."

When the deal was first announced in late 2009, NBC's audience ratings were sagging badly, raising doubts about the future of the broadcast pioneer that once boasted stars such as Johnny Carson, Jerry Seinfeld, Bob Hope, Milton Berle and Tom Brokaw.

More recently, though, NBC has bounced back with a new hit in "The Voice" and has a consistent ratings leader in "Sunday Night Football" during the fall and early winter. By last fall, NBC could boast for the first time in a decade that it was drawing the most viewers in the 18-to-49-year-old demographic prized by advertisers. Overall, NBC still ranked behind CBS and ABC, but at least it was no longer bringing up the rear in fourth place, as had been the case for several years.

Higher ratings translate into more advertising revenue, even though Comcast gets two-thirds of its revenue as a cable-TV and Internet access provider. NBC's improved success from TV shows also figures to bring in higher licensing fees from the Internet video services run by Netflix Inc. and Amazon.com Inc. (AMZN)

NBC's turnaround is one of the main reasons Comcast CEO Brian Roberts wanted to take complete ownership of NBCUniversal now.

"We thought that we would have to pay more later," Roberts said in an interview with The Associated Press.

"We really have known we wanted to buy 100 percent from the beginning of the transaction. We wanted to learn the business," he added. "We feel that now is an opportune time."

The deal, expected to be completed by the end of March, values NBCUniversal at $34 billion, not including $5 billion in debt. That's about 13 percent higher than two years ago, when Comcast's investment valued the company at about $30 billion, also excluding debt.

Compare that to CBS's stock price, which has more than doubled, or Disney's, which has risen 41 percent, since then. That makes the transaction for the rest of NBCUniversal a steal.

Complete ownership will let Comcast benefit more from the rising price of sports rights and other TV programs. It avoids solely being in the uncomfortable position of passing those costs onto customers. And long-term rights deals between the TV networks and their cable and satellite distributors have ensured the importance of TV, even as Web video is on the rise.

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Comments (2) -

TVMN Nickname posted over 4 years ago
So long, NBC. Enjoy your new home as a cable network.
joeseph Nickname posted over 4 years ago
There is no evidence that this will happen.
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Ratings

Overnights, adults 18-49 for September 28, 2016
  • 1.
    2.8/10
  • 2.
    1.9/7
  • 3.
    1.7/6
  • 4.
    1.4/5
  • 5.
    0.6/2
  • 6.
    0.4/1
Source: Nielsen

Reviews

  • Rob Owen

    Easily fall’s best broadcast network comedy pilot, NBC’s The Good Place offers a clever high-concept premise that’s complemented with intelligent, sometimes absurdist humor. Created by Michael Schur, co-creator of NBC’s Parks and Recreation, The Good Place is a highly serialized series that’s essentially set in heaven and stars Kristen Bell and Ted Danson. NBC made five episodes of The Good Place available for review, and the show not only holds up, but also it improves, deepening characters that initially feel one-note and frequently leaving viewers guessing with cliffhanger endings to many of the episodes. The combination of snappy dialogue and winning but flawed characters makes The Good Place a great bet for fans of smart TV comedy.

  • Maureen Ryan

    Pitch has swagger, for good reason. It gets the big things right; the Fox drama about the first female baseball player in the Major Leagues is one of the year’s most assured and exciting debuts. But part of what impresses about the pilot is also the way it confidently strings together so many small but telling details. Ginny (Kylie Bunbury) is the first woman to be called up from the minors to the big leagues, and no show since Friday Night Lights has done a better job of portraying the internal and external pressures that weigh heavily on young athletes asked to do much more than merely succeed on the field. Pitch will likely do a good job of getting viewers to root for it. The hope is that the show won’t be an impressive, short-lived curiosity, but rather a long-term phenomenon.

  • Kevin Fallon

    In a fall TV season that’s already making a splash for championing diverse, distinctive voices in an array of projects that they created, wrote, and starred in, Better Things on FX stands out. The show is created by, written by, and starsPamela Adlon. She plays Sam Fox, the single mother of three daughters modeled after her own reality-show-ready experience raising three girls in Los Angeles following a divorce. Sam is also, like Adlon, a working actress — on shows both raunchy, a la Californication, and animated for children, like her role on Recess. It’s a refreshingly blunt take on single motherhood without sacrificing the warmth of parental love, portraying the dance between selfishness and selflessness that’s at the heart of being a parent — especially one weathering the hormonal fireworks of a household of four women at different ages.

  • David Wiegand

    The fall TV season doesn’t count as much as it used to — we already know that. But no matter how many retreads the broadcast networks throw at viewers in the next few months, this fall will be memorable because of the premiere of Atlanta on Tuesday, Sept. 6, on FX. The half-hour comedy created by and starring Donald Glover (Community), simply and brilliantly recalibrates our expectations of what a TV comedy is and how black lives are portrayed on the medium.

  • Louisa Ada Seltzer

    The second reboot of the 1980s John Candy movie Uncle Buck, bumped by ABC from midseason, has the same tired jokes you'll find on any second-rate sitcom. Too bad, because Mike Epps is appealing and ABC would be wise to keep him around for future shows, but there’s just not enough to this show to suggest it will last past summer. It also airs against NBC’s America’s Got Talent, summer’s No. 1 program on broadcast, which may make it even harder to find an audience.

  • Neil Genzlinger

    Bryan Cranston brings his Tony Award-winning interpretation of President Lyndon B. Johnson to television in an adaptation of the Robert Schenkkan play All the Way, and it’s still quite a sight to behold, just as it was on Broadway in 2014. Nothing beats witnessing this kind of larger-than-life portrayal onstage, of course. But the television version, presented by HBO, offers plenty of rewards, allowing Cranston to work the close-ups and liberating him from the confines of a theater set. Cranston’s performance is a gem — in his hands, this accidental president comes across as an amazing bundle of contradictions, someone who seems at once too vulgar for the job and just right for it.

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