The New York Times speculated yesterday that the acquisition could be a threat to ESPN:
But Comcast’s impending acquisition of NBC Universal will certainly set off an effort to turn Versus into a viable alternative, if not a full-fledged competitor, to ESPN, The New York Times’s Richard Sandomir writes. Under Comcast’s ownership, Versus has transformed from the Outdoor Life Network to OLN, then, in 2006, into its current incarnation.
But Versus is a second-tier network whose highest-profile sports, the N.H.L. and the Tour de France, aren”t blockbusters. It lacks a studio show that would give it identity, like ESPN’s “SportsCenter,” or an announcer who is its defining personality.
Versus (and its sister network, the Golf Channel) will be turned over to NBC for an overhaul, assuming regulators approve the deal, a process that could take 12 to 18 months. Versus will probably be renamed something like NBC Sports Cable to reflect a more defined sports brand. On-air and production talent would migrate from NBC, to a certain extent, although Bob Costas would not be hosting IndyCar races.
Versus and Golf would certainly be overseen by Dick Ebersol, the chairman of NBC Universal Sports, who has never had a sports cable network to tinker with (the expanding Universal Sports channel is distributed through NBC stations and affiliates); he would no doubt quickly strip Versus of its current crop of late-night infomercials.
And, Bleacher Report says don't forget Norte Dame football ...
According to the Sports Business Journal, Comcast has its sights set on the Irish, in part because NBC's current contract with Notre Dame contains a clause that allows for a certain number of games to "mitigate to cable."
A quick glance at the 2010 schedule reveals a slate ripe with cable-caliber opponents: Western Michigan, Tulsa, Utah, and perhaps even a nostalgic neutral-site date with Army at Yankees Stadium.
Such reallocation to a cable channel would surely be perceived as a demotion and rankle a segment of the Notre Dame fan base, who are already disgruntled by ABC/ESPN's oxymoronic coverage-map approach to national broadcasts.
Fighting Irish faithful routinely combat the perception of entitlement, but the one arrogance we can't deny is the "right" to watch our team for free every Saturday during the fall.
Here is the top of today's press release announcing the acquisition. The link will take you to the full release:
Comcast and General Electric announced today that they have signed a definitive agreement to form a joint venture that will be 51 percent owned by Comcast, 49 percent owned by GE and managed by Comcast. The joint venture, which will consist of the NBC Universal (NBCU) businesses and Comcast’s cable networks, regional sports networks and certain digital properties and certain unconsolidated investments, will be well positioned to compete in an increasingly dynamic and competitive media and digital environment.
The combination of assets creates a leading media and entertainment company with the proven capability to provide some of the world’s most popular entertainment, news and sports content, movies and film libraries to consumers anytime, anywhere. The joint venture will provide consumers the broadest possible access to content, and support high-quality, award-winning content development across all platforms including film, television, and online. It will be anchored by an outstanding portfolio of cable networks and regional sports networks that will account for about 80 percent of its cash flow, including USA, Bravo, Syfy, E!, Versus, CNBC and MSNBC. The joint venture will be financially strong with a robust cash-flow-generation capability.
Under the terms of the transaction, GE will contribute to the joint venture NBCU’s businesses valued at $30 billion, including its cable networks, filmed entertainment, televised entertainment, theme parks, and unconsolidated investments, subject to $9.1 billion in debt to third party lenders. Comcast will contribute its cable networks including E!, Versus and the Golf Channel, its ten regional sports networks, and certain digital media properties, collectively valued at $7.25 billion, and make a payment to GE of approximately $6.5 billion of cash subject to certain adjustments based on various events between signing and closing.
Comcast Chairman and Chief Executive Officer Brian Roberts said, “This deal is a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding. In particular, NBCU’s fast-growing, highly profitable cable networks are a great complement to our industry-leading distribution business. Today’s announced transaction will increase our capabilities in content and cable networks. At the same time, it will enhance consumer choice and accelerate the development of new digital products and services. GE has provided NBCU with a great home and has dramatically and positively transformed the business. We are honored that under this agreement Comcast would take over the stewardship of this important collection of assets and are absolutely committed to investing in NBCU and ensuring that it is a vibrant, financially strong company able to thrive in a rapidly evolving marketplace by delivering innovative programming. We are particularly pleased to be creating this new joint venture with GE and Jeff Immelt and to have their continued involvement.
“For Comcast, this transaction is strategically compelling and will generate attractive financial returns and build shareholder value,” continued Roberts. “It is also expected to be immediately accretive and will also allow us to maintain our strong commitment to returning capital to shareholders– all while increasing the scale, capabilities and value of our cable distribution, content and digital assets. Significantly, it is entirely consistent with our intense focus on value creation and our disciplined strategy of pursuing profitable growth in areas complementary to our distribution business.”
GE Chairman and CEO Jeff Immelt said, “The combination of Comcast’s cable and regional sports networks and digital media properties and NBCU will deliver strong returns for GE shareholders and business partners. NBCU has been a great business for GE over the past two decades. We have generated an average annual return of 11 percent, while expanding into cable, movies, parks and international media. We are reducing our ownership stake from 80 percent to 49 percent of a more valuable entity. By doing so, GE gets a good value for NBCU. This transaction will generate approximately $8 billion of cash at closing with an expected small after-tax gain. We have many opportunities to invest in our high-technology infrastructure businesses at attractive returns. I believe that the new NBCU will deliver value for both Comcast and GE in the future. We will give consumers and advertisers more choice and our cable and digital assets will be second to none. I am confident Brian Roberts and his team at Comcast will be great partners.”