Comcast to buy stake in NBC – Antitrust laws put to the test

Time to dust off the antitrust laws.  Comcast is purchasing 51 percent of NBC Universal from General Electric.  There really is nothing positive about this merger.

First the deal:

General Electric, which owns 80 percent of NBC Universal, has reached an agreement to purchase the 20 percent owned by French media giant Vivendi for $5.8 billion.

GE will in turn sell 51 percent of NBC Universal to Comcast (the number 1 U.S. cable company) for $13.75 billion.

About Comcast:

Comcast is the number 1 cable company in the United States serving roughly one-quarter of all American households in 39 states.  They own Versus, The Golf Channel, E! Entertainment and regional sports channels.

About NBC Universal:

NBC Universal owns NBC, CNBC, MSNBC, Universal Studios, NBC Universal Television Group, USA, Syfy, Bravo, iVillage, qubo, Telemundo, The Weather Channel, Hulu.  They also own more than 25 television stations across the country and theme parks.

Concerns & Impacts:

The sales pitch written in the papers addressed movies appearing on cable faster.  I guess they’re not talking about the straight-to-cable trash that shows up now.  And Comcast may allow television shows to become available on cell phones and other devices.  (A Hulu app for the iPhone?  There really is an app for everything!)

We have heard rumors that Hulu’s free days could be coming to an end.  This purchase could ensure that.

There could also be a big concern with Comcast restricting access to content that they own or by raising the costs for that content to their competition.  DirecTV has already dropped Comcast-owned Versus because of an alleged rate increase.  (about 21 cents to 26 cents per subscriber per month).  Versus brings phenomenal programming like National Hockey League games and bull riding. 

There is another battle between the two companies over Comcast-owned regional sports networks. 

No doubt, Comcast will pull the same garbage over their new NBC networks.  They could charge higher prices to the competition (DirecTV, uVerse, Dish) for the stations they own (NBC, USA, SyFy, etc) thus making it financially beneficial for customers to jump to Comcast.  They could wind up being the only company offering USA and MSNBC in some markets. 

Isn’t that one of the reasons why the antitrust laws are in place?

After the problems Comcast has already caused for DirecTV, don’t be surprised if DirecTV and AT&T (uVerse) try to purchase other media companies in order to compete and keep Comcast in line.  This would undoubtedly reduce competition.

The last time we saw a merger like this was the debacle merger between AOL and Time Warner.  As a result, Time Warner Cable has spun off into its own company and AOL is spinning off this week. 

Another potential issue is station placement.  Don’t think for a second that Comcast wouldn’t move all of its company-owned content to premiere locations or on basic packages while the competition is on less desirable channels / tiers. 

MSNBC (Comcast owned) can reside on their basic tier package while competitors Fox News and CNN could wind up on higher channel numbers and more expensive packages. 

It’s a bit ironic really.  Fox News and its conservative leanings believe in this capitalist corporate takeover mentality.  As a result of a deal like this one, their station could find themselves in a higher channel location hidden between a religious station and C-SPAN 3 or on a higher tier which charges more money to customers in order to receive the channel. 

As the Fox News demographic is older – most have cable rather than satellite.   Few spend the extra money for the higher packaged tiers.  Many residing in condominiums take the basic cable package which often is included in their homeowner’s fees.  So, if Fox News was in the highest tier package, many seniors (Fox News viewers) would be left out. 

Ruppert Murdock should be calling all Republicans demanding that they come out against this merger – unless he can purchase Disney which will provide Murdock with a stronger bargaining position. 

It’s time we stand up and make sure that this Comcast / NBC Universal deal does not occur.  It is bad for competition and bad for customers.

Sources:

Comcast-NBC deal moves closer after GE to buy Vivendi’s NBC stake for $5.8B – Daily Finance

Mega-Media Era Begins:  GE/Vivendi Deal Clears Way for Comcast/NBC Merger – The Huffington Post

Comcast’s big bet:  Deal for control of NBC Universal comes with risks and opposition – Sun-Sentinel

Comcast Gets NBC From G.E. in Deal That Reshapes TV – The New York Times

The NBC Universal sale by the numbers –  The New York Times

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