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Media

Minority Partner Could Kill Comcast (CMCSA) Deal For NBCU (GE)

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By Douglas A. McIntyre Updated Published
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GE (NYSE:GE) investors are thrilled that the conglomerate may be able to rid itself of its underperforming media unit, NBC Universal. It appears that GE is close to a deal with cable giant Comcast (NADSAQ:CMCSA) to create a joint venture to hold the entertainment company’s assets, a JV in which Comcast would be the majority partner.

NBCU is  one of the largest US media companies, but the one with the least favorable prospects. It has a network TV operation at a time when fewer and fewer people are watching network TV. It has a movie studio at a time when premium content profits are under siege by digital distribution businesses.

The minority owner in NBCU would block the Comcast deal completely. According to the LA Times, “There’s  a little-known clause in the contract between Vivendi and General Electric Co., which owns 80% of NBC Universal, that gives the French media conglomerate veto power on any change in control. ”

Vivendi could use its option to push for an extraordinarily high price for its 20% of NBCU, or it could say that it will not sell its share at all hoping for a higher offer for NBCU or a recovery of the entertainment firm’s prospects as the economy improves.

The NBCU restructuring deal has always has several hurdles to jump over including government approval. As it turns out, Vivendi may be the single biggest hurdle of all.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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