Peacock Network awaits its fate

With the planets now aligned for Comcast to acquire a controlling 51% stake in NBC Universal, the next question is: What happens to NBC/Telemundo and their O&O stations? The broadcasting assets are both the biggest impediments to regulatory approval of the transaction and the most likely to be divested.

As lawyers work out the details of the deal to have Vivendi sell its 20% of NBCU for $5.8 billion, attention now turns to getting the transaction approved by the FCC and antitrust watchdogs. In fact, the Wall Street Journal reported that the deal that Vivendi struck ensures that General Electric will have to buy about $2 billion of the Vivendi stake if the GE-Comcast joint venture isn’t closed by the end of 2010.

GE may not stay around either. The WSJ story says Comcast will expand its 51% stake over seven years to 100% as GE is gradually bought out.

Critics are already lining up, even before any deal is officially announced. The Seattle Times was quick to hit the presses with an editorial declaring that, “If there ever was a corporate marriage federal regulators should block it is Comcast Corp.’s proposition to buy NBC Universal.” It warned that the “conglomeration of content and its delivery system” could result in smaller cable systems and viewers being charged a lot more from programming.

Throughout the deal negotiations, it was clear that Comcast was after NBCU’s cable networks – USA, Bravo, MSNBC, CNBC and Oxygen – and perhaps its content (movie/TV) studio. It’s doubtful that Comcast is really excited about being in the broadcast network television business, let alone owning local TV stations.

NBC affiliates are no doubt wary of going into retransmission consent negotiations with cable systems owned by the same parent company as their network.

Shedding the broadcast assets would be a simple way to make this media mega-merger more palatable to media consolidation critics, Members of Congress, the FCC and antitrust agencies.

To date, though, there have been no rumors of potential bidders for NBC or Telemundo and their respective O&O station groups.

RBR-TVBR observation: The most logical buyers are, of course, News Corporation or CBS Corporation. A deal with either, though, would face even greater regulatory hurdles than having Comcast as the buyer will.

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