GE, Comcast reportedly value NBCU at $30 billion

One major obstacle seems to have been settled in Comcast's quest to buy NBC Universal from General Electric--how much to pay for it.

Both companies have reportedly agreed on a price of $30 billion for GE's movie and TV unit, according to sources cited Monday by Reuters and The Wall Street Journal (subscription required for full story).

The agreement on the worth of NBC Universal (NBCU) is a major step toward paving the way to create a new, privately held company that would combine NBC's TV stations and Universal Studios with Comcast's TV and cable stations. NBCU's Web properties include iVillage and the online video site Hulu, in which it is a co-owner along with News Corp. and Walt Disney Co.

Under the terms of the proposed deal, Comcast would own a majority 51 percent slice of the new entity, with GE owning the remaining 49 percent.

Further, the two companies have discussed an option whereby GE would sell off all or most of its ownership of the new company to Comcast over the next seven years, according to sources cited previously. Recent reports say that GE and Comcast have now decided how to price the new entity after the deal goes into effect so that GE faces no problems selling off its remaining stake.

The valuation of NBC Universal was seen as a major challenge in advancing the deal, according to sources. Comcast naturally was intent on maximizing the value of its own networks and minimizing the value of NBCU to limit the amount of up-front cash it would need to invest in the new firm. Latest reports say that Comcast would inject anywhere from $4 billion to $6 billion into the new entity.

However, both companies have reportedly agreed to base Comcast's final cash payment on NBCU's financial performance before any finalized deal closes. If its performance tanks, Comcast could end up paying less.

Other challenges remain, too. French media giant Vivendi owns 20 percent of NBCU. Vivendi has reportedly told GE that it wants to sell its stake but has yet to voice approval on any deal of its own. A valuation of the company's 20 percent ownership is currently being discussed, said the source cited by Reuters.

Of course, even if Vivendi agrees to a deal and all looks good, regulatory approval would be required, especially since Comcast would own a huge chunk of national and local media outlets. The Journal said that people close to the talks believe regulatory approval could take at least eight to 12 months.

Comcast's bid for a majority stake in NBC Universal was first revealed in early October.

Requests for confirmation to GE and Comcast were not immediately returned.

[Carpeoccasio]

The fact that Comcast is big enough to buy NBC Universal goes to show that we all pay too much for cable TV.

[gsmiller88]

I wonder what the deal will mean for Comcast's Fancast and NBC's Hulu?

[c60chemist]

I'm more concerned about 30 Rock. I wonder if Comcast is capable of laughing at itself. They could ruin one of the best shows on TV.

[CCastilla]

Great, we now get to hate a network

[drhamad]

When did we decide it's OK for distribution companies to own the content providers? We don't allow this in theaters, why are we allowing it in our homes? There's got to be some antitrust issue here.

[bjlevine]

When Comcast (NBC) decides to charge for its content and the ISPs decide to charge Comcast for carrying their content, we'll be rid of NBC. Eventually, we'll have nothing but Fox. Yeah, be afraid...be very afraid.

[drichards1953]

Comcast is a lousy cable operator, and is likely to be a worse network operator, and that will take some doing to be worse than GE. This "deal" should not be allowed to move forward. It raises some rather interesting anti-trust issues. Comcast should either be a content provider or a cable system operator, not both.

TimeWarner, until recently, was also a content provider and a cable system operator, so this may not be the best way to derail the deal. If I am MSNBC, I would be "very worried" for my job.

[zeroplane]

This is a sign of the beginning of the end.

I guess I will get my entertainment from the free hacks on youtube.. bye bye cable and major networks..

I am sure the general public will settle for really horrible production quality content that is free and entertaining over "polished" content that costs too much.

Even then I am sure Comcast will simply ignore the FCC and start filtering everything that they don't own. I guess I will get internet from a wireless carrier instead of a cable company (forget DSL it sucks where I live).

http://www.clearwirelessinternet.net/

[shootfirst]

I agree with 30 Rock hehe. Whats worse is episodes they already shot that will inevitably state GE as the owner of NBC. Whats going to happen to Jack he is in charge of NBC and microwaves! I am sure they could turn this into an evil deal brought about by Devon.

I agree if Comcast has that much money to buy NBC, why are they throttling and not building better infrastructure. However GE are the real geniuses for agreeing to sell.