Background
Comcast was, at the time, the largest cable television provider in the United States. It also owned a number of major cable networks, including E!, Golf Channel, and Versus. In 2004, Comcast attempted a hostile takeover of The Walt Disney Company for $41 billion, which would have made Comcast the world's largest media conglomerate, if approved. The deal fell through, however; Comcast's motivation for the deal was centered around gaining control of ESPN, which a Comcast executive described as "the most important and valuable asset" in Disney's portfolio. The same year, General Electric (GE) acquired an 80% stake in Universal Studios from Vivendi, merging it into NBC to form NBC Universal. By 2009, NBC Universal's financial performance had struggled due in part to the poor performance of recent Universal Studios' productions, and NBC ranked fourth at the time among the major broadcast television networks in the United States. By contrast, some of NBC Universal's cable networks (such as MSNBC, Syfy, and USA Network) were reporting steady gains in viewership. After the failed Disney deal, Comcast focused on its existing networks (along with its Comcast SportsNet regional sports networks), and acquired a stake in the film studio Metro-Goldwyn-Mayer (MGM).[3]
Proposal
Negotiations between Comcast and NBC Universal for a potential acquisition began as early as March 2009; News Corporation and Time Warner were also reportedly interested in purchasing NBC Universal. By September 2009, Comcast had negotiated a purchase of a stake in NBC Universal from GE, but the overall deal was held up by negotiations with Vivendi for the sale of its 20% stake to GE.[4] On December 3, 2009, Comcast and NBC Universal confirmed a $6.5 billion deal to merge the two companies, pending approval from the United States Department of Justice Antitrust Division; the deal would be structured as sale of Vivendi's stake in the company to GE for $5.8 billion, followed by Comcast acquiring a 51% controlling stake of NBC Universal, and contributing its existing media properties to the company, themselves valued at $7.25 billion. As a result, NBC Universal would become a joint venture between Comcast and GE, with Comcast holding a 51% majority stake. As a whole, the deal valued NBC Universal at $30 billion. The deal included an option for General Electric to sell further stakes in the company to Comcast over seven years, or for Comcast to buy stakes at "specified times". Jeff Zucker was to remain CEO of NBC Universal after the acquisition, and remain headquartered in New York, but would report to Comcast.[5]
Comcast CEO Brian L. Roberts described the deal as a "perfect fit" for the company, as Comcast would be able to bolster its role as a creator and distributor of content, with a particular emphasis on "[the] multiplatform ‘anytime, anywhere’ media that American consumers are demanding"; increasing access to NBC-owned content through various platforms.
Opposition
The acquisition was opposed by several media activists, particularly those who were against vertical integration. Free Press argued that Comcast would use the deal to stifle competition in online video by restricting where NBC-owned content can be offered, and charging higher rates to television providers for accessing NBC-owned networks, having to pass these charges on to consumers.[6][7] There were concerns from the owners of NBC's affiliates, who urged the FCC to require that Comcast maintain NBC programming on over-the-air television, and not move it exclusively to cable. Several competing internet service and television providers urged the FCC to place conditions on Comcast if the deal were to be approved, including requiring that Comcast adhere to the principles of net neutrality, offer wholesale access to its broadband services, and place limits on how Comcast can leverage its NBC-owned stations in retransmission consent negotiations to inhibit competition. AOL proposed that the FCC enforce its program access rules for Comcast's online video content as well, requiring the provider to offer it to competitors at a fair rate. By June 22, 2010, over 32,000 comments about the deal had been sent to the FCC.[8]
Approval and closure of acquisition
On January 18, 2011, the FCC and the United States Department of Justice (DOJ) approved the acquisition. Four months later, Meredith Attwell Baker, the FCC commissioner who approved the deal, was hired as a lobbyist by Comcast.[9] Upon the completion of the acquisition, which took place on January 28, NBC Universal was slightly renamed to "NBCUniversal", with the change intended to reflect "unity" between NBC and Universal Studios.[2] Comcast and GE formed the joint venture holding company NBCUniversal, LLC on the same day.[10] NBC Universal, Inc. became a wholly owned subsidiary of the holding company and was renamed NBCUniversal Media, LLC on January 29.[11]
Comcast agreed to offer an internet service plan for qualifying low-income families for at least three years as part of the acquisition. The plan, "Internet Essentials", initially offered a 1.5-megabit connection for $9.95 per month (increased to 5 megabits in 2013)[12]
