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April 18, 2014

Top TV Stories of 2009: Comcast buys NBC Universal

by John Scott Lewinski, posted Dec 15th 2009 10:02AM
When Comcast bought NBC, the media map changed.As 2009 draws to a close, the world has exactly what it needs -- another massive media conglomerate.

On Dec. 3, cable giant Comcast justified a long-standing industry rumor and completed an $8 billion deal to acquire a controlling 51% of NBC Universal stock from former owner General Electric.

Huge companies gobbling up big (but not as huge) companies is nothing new in any business, especially broadcasting. All of the major networks are owned by parent companies. Disney owns ABC. Newscorp owns Fox. Westinghouse owns CBS. Now, Comcast possesses NBC -- as Conan O'Brien celebrates in this clip.

Who owns what doesn't matter to TV viewers who are mainly interested in the quality of the programs they get to watch every night.

But what happens if that quality diminishes because a network's new owner wants to save a little scratch -- in light of the recent massive investment it just made to acquire the big pile of network stock? That's the concern when a network changes hands.

According to Comcast's press materials on the deal, the company vaulted from a medium-sized cable operator to the national top provider, with more than 23 million subscribers in 39 states. Its previous mega-move was a $72 billion purchase of AT&T's cable network in 2002. That purchase put Comcast on a tier with the world's bigger media companies.

But it wasn't enough for Comcast as the company failed in a bid to buy Disney in 2004. This acquisition of NBC finally positions the cable provider in the rarefied media air. GE will retain 49% of NBC Universal, but Comcast is expected to continue purchasing stock and solidifying its hold over the network.

Here's the bad news. As part of the convoluted deal, NBC will take on more than $9 billion in debt to pay off GE. No matter how you shuffle the books, that's billions that won't go into programming.

That means fewer producer deals, fewer writers cranking out quality ideas and less original programming. When you consider NBC is already saving money by trotting out Jay Leno every night and killing five hours of prime time every week, there doesn't seem to be much room left for belt tightening. NBC viewers could be looking at more reality shows and fewer sitcoms and dramas. It's nice not paying for professional actors when you're already $9 billion in the hole.

However, the strategy for Comcast's rule over NBC could roll the other way
. If Comcast is truly eager to prove it's an entertainment industry leader, it could up the stakes and steer more money into the network's flagging news department, morning programming and hour-long drama schedule.

Whatever the new bosses decide, NBC and Comcast can't sit around for long toasting the new merger. In an era in which cable networks compete elbow to elbow with the traditional broadcast giants, there will be no government buy-out if "The Peacock" falls. NBC can be allowed to fail.

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