NEW YORK — Comcast Corp., the nation’s biggest cable and broadband Internet company, on Thursday announced plans to take over NBC Universal, creating a new kind of media colossus that would not only produce some of America’s most popular entertainment but also control viewers’ access to it.
The roughly $13.75 billion purchase set off immediate reaction from consumer groups and lawmakers in Washington, heralding an epic regulatory battle over concentrating so much power in one company.
Almost one in four cable subscribers in the U.S. is a Comcast customer. NBC Universal owns cable networks such as Telemundo, MSNBC and Bravo; TV shows such as “The Jay Leno Show”; regional stations; and Universal Studios.
Sens. Jay Rockefeller, D-W.Va., chairman of the Commerce Committee, and Herb Kohl, D-Wis., chairman of the Judiciary antitrust subcommittee, called for hearings to review the deal’s impact on TV competition and consumers. Michael Copps, a Democratic member of the Federal Communications Commission, said the merger faces a “very steep climb with me” and raises many doubts over whether it would be in the public’s interest.
The deal also must overcome the poor track record of previous mergers between media giants, most notably the disastrous pairing of AOL and Time Warner.
In a conference call, Comcast chief executive Brian Roberts said the acquisition would further his family’s vision of developing the company into an entertainment powerhouse from its humble beginning as a single cable system operator in rural Mississippi. Roberts said he thought the deal was “approvable” by regulators.
“This is pro-consumer and is going to accelerate what I believe consumers want, which is to access all different types of content on different platforms at different times,” he said.
Under the deal, which has been in the works for months, Comcast would pay $6.5 billion in cash upfront and contribute $7.25 billion in cable assets to acquire a 51 percent stake in NBC Universal from its current owner, General Electric, which would retain a 49 percent stake. Comcast would control the joint venture’s day-to-day operations. GE would take $9.1 billion in debt to finance the deal. In all, the joint venture would control more than one out of every five television-viewing hours.
NBC CEO Jeffrey Zucker will remain as head of the joint venture, based in New York. NBC Universal owns 34 TV stations across the country and numerous cable networks, the biggest of which are USA, CNBC, MSNBC, Syfy, Bravo and Oxygen.
While NBC Universal is still highly profitable, some of its major holdings, particularly NBC and Universal Studios, are struggling.
But NBC still has some significant assets, such as a contract with the NFL to show games on Sunday nights and rights to the 2010 Winter Olympics in Vancouver and 2012 Summer Games in London.
Key events in NBC history
1926: National Broadcasting Co. is formed by General Electric, Westinghouse Electric and Radio Corp. of America after buying broadcast assets from AT&T; launches first permanent radio network in United States.
1931: Experimental TV broadcasts begin from atop Empire State Building.
1932: RCA becomes sole owner.
1939: NBC begins regular television broadcasts in New York, with opening of World’s Fair.
1941: NBC and CBS stations in New York get nation’s first commercial television licenses.
1943: ABC gets its start after NBC sells one of its two radio networks under pressure from government.
1947: “Meet the Press” premieres.
1948: Milton Berle becomes first television star on “Texaco Star Theater.” 1950: Trademark granted for three-note NBC chimes.
1952: Launch of “Today,” first network early-morning news show.
1954: NBC makes first coast-to-coast color broadcast; “The Tonight Show” debuts with Steve Allen
1962: Johnny Carson takes over “Tonight.”
1964: NBC broadcasts its first Olympic Games.
1975: “Saturday Night Live” debuts as “NBC’s Saturday Night.”
1984: “The Cosby Show” debuts, becomes TV’s biggest hit; “Seinfeld” (1989), “ER” and “Friends” (1994) make NBC’s Thursday “must-see TV.”
1986: GE restores its ties to NBC, acquiring RCA.
1996: NBC and Microsoft launch MSNBC on cable TV and Internet.
2002: NBC acquires Spanish-language broadcaster Telemundo and entertainment cable network Bravo.
2004: NBC Universal formed after merger with Vivendi Universal Entertainment.
2008: Launch of Hulu, online video joint venture with Fox network owner News Corp. ABC later joins.
2009: NBC, fourth in ratings behind CBS, ABC and Fox, brings Jay Leno to prime time. GE sells controlling stake in the company to Comcast.
Sources: NBC, Associated Press research
Key events in Comcast history
1963: Ralph Roberts buys American Cable Systems, a 1,200-subscriber cable-TV operator in Tupelo, Miss., for $500,000.
1969: Company is renamed Comcast; it goes public in 1972.
1990: Roberts’ son, Brian, is named president.
1996: Buys majority ownership of Spectacor — owner of the Philadelphia Flyers hockey team and two arenas — and acquires the Philadelphia 76ers basketball team; forms regional sports cable channel; launches high-speed Internet service in Baltimore.
2002: Buys AT&T Broadband cable systems to become the largest cable-TV operator, with 22 million customers; unveils high- definition TV and video-on- demand services.
2004: Makes unsuccessful hostile bid for Disney Co.
2005: Joins a group of investors to buy a 20 percent stake in MGM movie studio. Comcast unveils digital phone service and creates Internet division.
2006: Comcast signs video- on-demand distribution deal for Disney content.
2008: Joins investment in wireless broadband provider Clearwire Corp.
2009: Grows to the largest Internet service provider and No. 3 phone company; buys controlling stake in NBC Universal from GE.
Sources: Comcast Corp., Associated Press research
