Monday, September 21, 2009

Who Might Buy NBC

Like sharks circling their prey, media companies are smelling blood in the water and itching to bite. Vivendi is looking to unload their 20% ownership in NBC and GE may be faced with a decision, buy, sell or spin. "GE has already said it is unlikely to pay the $5 billion to $7 billion to buy back the stake, which Vivendi acquired in 2004 as part of the merger between Universal and NBC." Spinning it off into a new company may show its valuation to be less than it is and open itself to an acquisition. Seeking a buyer outright may allow GE to get more money for their piece.

So the question is, if NBC is for sale, who could the prospective buyers be: Time Warner, Comcast, Liberty. Funny how the names mentioned all are cable companies. I guess, despite competition, cable operators are doing ok. Distribution and content seem to go together. GE doesn't have that distribution business to support holding on to NBC; the others do. The synergy between content and distribution is only getting stronger. Perhaps too there should be another name added to this list: Verizon. It seems the best way to compete in this new media world. So spin the wheel and pick your horse cause this race could potentially go down to the wire.

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