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Contrary to what many pessimistic job seekers are saying, there is still work out there for M&A lawyers.
Last Thursday, Comcast and General Electric announced a joint venture where Comcast will own 51% of NBC Universal (NBCU). According to Am Law Daily, this deal has been in the works for about a year. The deal reportedly valued NBCU at about $30 billion and involved Comcast contributing assets worth approximately $13.75 billion.
The Wall Street Journal reports that this joint venture combines the largest U.S. cable operator with a huge media conglomerate that owns a variety of interests including TV networks, a film studio, and even a theme park. If this deal goes through, Comcast would own interests in many television channels including several sports channels, Versus, the Golf Channel, E!, USA, Bravo, SyFy, CNBC, and of course NBC. Under these terms, Comcast would have control over assets that have revenue of $51 billion–the largest in the industry. Primarily for these reasons, another article predicts that this deal will draw significant scrutiny from antitrust regulators. In fact, according to a memo from Jeff Zucker, CEO of NBCU (who will remain CEO after the deal), NBC expects regulatory approval to take from 9-12 months.
My primary interest in the deal, however, is a comment by Brian Roberts, Comcast’s CEO, on the Comcast Blog. He mentioned that this move creates more opportunities “to provide ‘anytime, anywhere’ content to consumers.” It is this note that draws the attention to the Internet interests involved in this deal–NBC’s Hulu, Comcast’s Fancast, and the TV Everywhere (a joint enterprise between Comcast and Time Warner).
While it is certainly true that this deal creates opportunities for additional programming to be offered for free online, there are concerns that having these sites essentially under one roof will create incentives to limit the free programming–at least for non-Comcast cable or Internet users.
Steve Burke, Comcast’s operating chief, answered one such question: Is ‘Hulu Premium’ an option? He answered, “That is certainly not in the cards,” implying that Hulu will maintain its free model. However, the temptation to limit its offerings can only increase as it will be owned by a cable company that is not only an Internet provider, but also provides its own similar online service in Fancast.
Brian Roberts also alluded to this as he was answering questions about Hulu: “We see, with more distributors and more technologies, what consumers want. We want to be part of delivering to them. The reality is consumers want electronic distribution. Some of it, they want it for free. Some of it, they want it in subscription, and some of it, they want it pay-per-view.”
I can’t speak for everyone, but this is one consumer who prefers free. I hope that when the dust settles, I can still fire up the laptop and catch up on old episodes of The Simpsons for free, no matter who provides my cable or Internet.
– Josh Lee
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