Comcast to leap beyond cable

By Deborah Yao

Associated Press

Comcast Corp. announced Thursday it plans to buy a majority stake in NBC Universal for $13.75 billion, giving the nation’s largest cable TV operator control of that broadcast network, an array of cable channels and a major movie studio.

The deal could mean that some movies reach cable more quickly after showing in theaters, and that TV shows could appear faster on cellphones and other devices.

It was already raising concerns, however, that Comcast would wield too much power over entertainment.

If the deal clears regulatory and other hurdles, Comcast would rival The Walt Disney Co. — which Comcast CEO Brian Roberts already tried to buy.

Comcast, which already serves a quarter of U.S. households that pay for TV, would gain control of the NBC broadcast network, the Spanish-language Telemundo network and about two dozen cable channels, including USA, Bravo and Syfy. It also would have regional sports networks, Universal Pictures and theme parks.

The deal is a major turning point for Comcast, catapulting the Philadelphia-based company to a media conglomerate and above the pack of cable operators that remain content to run their regional cable systems.

“Does the world ever stand still?” Roberts said. Bringing NBC Universal into the Comcast family is “pro-consumer” and would allow the company to more quickly deliver “what consumers want, which is access to all different types of content on different platforms and different times.”

In agreeing to buy 51 percent of NBC Universal from General Electric Co., which has controlled NBC since 1986, Comcast hopes to succeed in marrying distribution and content in a way Time Warner Inc. could not. AOL and Time Warner are undoing their ill-fated marriage Dec. 9. Time Warner has already shed its cable TV operations.

Comcast’s Roberts and GE CEO Jeff Immelt have been discussing the deal for months, and the final weeks came down to GE’s persuading French conglomerate Vivendi SA to first sell its minority stake.

Comcast made the deal because it is eager to diversify its holdings. It faces encroaching threats from online video and more aggressive competition from satellite and phone companies that offer subscription TV services.

For entertainment viewers, the deal means Universal Pictures movies could get to cable faster.

TV shows could appear on mobile phones and other devices faster as part of Comcast’s plans to let viewers watch programs wherever they want. Comcast already is letting subscribers watch cable TV shows online in trials, with a nationwide launch in December.

Thursday, Comcast pledged that NBC Universal shows that now cost money over its cable video-on-demand service would be free for three years after the deal closes.

Comcast also said it would maintain free, over-the-air TV on NBC stations — a business model that is eroding because of falling advertising revenue. Comcast also pledged to improve public interest programming. And it said it would not let its business interests affect NBC News.

But consumer advocates and even other cable operators worry about the deal, saying people could end up paying more for TV.

Once Comcast controls NBC Universal, other subscription-TV operators — DirecTV and Verizon, to name a few — would be negotiating with a rival on how much they have to pay to carry NBC broadcast and cable channels. An NBC Universal under Comcast might be less willing to budge than one under GE.

Consumer groups and small cable operators worry that as a result, programming fees that are already creeping up could rise even faster, with the costs passed to customers in their monthly pay-TV bills.