General Electric has committed to buy at least $345 million in advertising from NBC Universal over five years after selling a controlling stake in the company to Comcast, according to a regulatory filing Friday (the deal is expected to close in about a year). GE will buy at least $59 million of ads in the new NBC Universal each year for five years after the sale of a 51% stake to Comcast. In addition, GE is required to buy $50 million worth of ads in connection with the 2012 Olympic Games, whose rights NBC holds.
From the filing:
“Section 6.24. Advertising. During the five (5) calendar years commencing at the beginning of the first calendar year following Closing, GE shall, directly or indirectly through one or more of its Subsidiaries, purchase advertising from Newco or one or more of its Subsidiaries such that, in each such year, GE will purchase no less than $59 million of gross advertising, in the aggregate, from Newco and its Subsidiaries, and GE will purchase an additional $50 million of gross advertising in connection with the 2012 Olympic Games. During the remainder of the calendar year in which the Closing occurs, GE shall, directly or indirectly through one or more of its Subsidiaries, purchase advertising from Newco or one or more of its Subsidiaries in an amount and in a manner consistent with its advertising plan for such calendar year or, in the absence of such a plan, in the ordinary course of business in an amount and in a manner consistent with such period in the prior calendar year. Purchases of advertising by GE and its Subsidiaries pursuant to this Section 6.24 shall be effected on arms- length terms; provided that GE and its Subsidiaries shall be entitled to preferential client treatment, including access to marketing execution and placements, comparable to the top tier or highest spender category of advertising or past practice, whichever is more favorable to GE.”
In 2008, GE spent $1.2 billion on advertising across all media outlets, according to TNS Media Intelligence.