Comcast on Thursday began courting lawmakers and investors to win over skeptics to its $30 billion proposed merger with entertainment giant NBC Universal.
PHILADELPHIA — Comcast on Thursday began courting lawmakers and investors to win over skeptics to its $30 billion proposed merger with entertainment giant NBC Universal.
The nation’s largest cable company, with 23.9 million subscribers, announced it would acquire a controlling interest in NBC Universal entertainment conglomerate from General Electric for an initial $6.5 billion down payment in cash and other payments over the next seven years.
CEO Brian Roberts said the merger rounds out his strategic vision and that investors should view Comcast as two distinct companies — with cable TV and broadband distribution in Philadelphia, and entertainment in New York.
The deal would merge the cable giant and Internet distributor with one of the nation’s most profitable operators of cable channels. Those channels include USA, Syfy, MSNBC, CNBC and Bravo, as well as part-ownership in the History Channel, A&E and the Weather Channel.
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He said the conglomerate had five cable channels that earned $200 million a year in profits. “We were amazed at how healthy the cable channels were,” Roberts said.
But NBC Universal also operates the troubled NBC broadcast network, 10 local NBC-TV stations, the Universal movie studio and theme parks.
Comcast-NBC Universal faces stiff regulatory reviews and opposition from unions, public-policy advocates and an association of small cable operators.
Matthew M. Polka, president and CEO of the American Cable Association in Pittsburgh, came out strongly for government action.
Comcast-NBC Universal would “leverage its enhanced market power to force other pay-television providers to distribute all of its combined Comcast-NBCU programming on basic tiers, regardless of consumer interest in paying for this content,” Polka said.
In a bid to neutralize opposition, high-ranking Comcast executive David Cohen pledged in a letter that the cable giant would respect the editorial independence of NBC News and that Comcast would support the flagging national NBC broadcast-TV network that’s available in all households.
In the 10-point letter, Cohen also said Comcast, which has fought unionization in its 100,000-employee work force, would honor union contracts at NBC Universal.
Julius Genachowski, chairman of the Federal Communications Commission, said, “The FCC will carefully examine the proposed merger and will be thorough, fair, and fact-based in its review.”
To overcome investor skepticism, Comcast said Thursday it will boost its cash dividend 40 percent to almost 38 cents a share.