What Happens to ’30 Rock’ Jokes Now That Comcast Is Buying NBC?

This morning it became official: Comcast is buying NBC Universal in a deal estimated to be worth $30 billion.


This morning it became official: Comcast is buying NBC Universal in a deal estimated to be worth $30 billion. Although GE will still have a 49% stake in the business, one thing’s clear: 30 Rock will never be the same.

Go ahead, try and make a funny joke about Comcast. Not so easy, is it? We’re awaiting comments from the Shinehardt Wig Company about the transaction.

PHILADELPHIA, PA and FAIRFIELD, CT – Dec. 3, 2009 – Comcast (NASDAQ:
CMCSA, CMCSK) and General Electric (NYSE: GE) 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

Comcast also announced the creation of Comcast Entertainment Group
(CEG), which will house Comcast’s interest in the joint venture and
will stand alongside Comcast Cable, which operates the company’s
traditional cable business.

Comcast Chief Operating Officer Steve Burke said, “Both Comcast and
NBCU have excellent track records of integrating and growing
multi-billion dollar businesses, including significant content
acquisitions. In addition, we have both developed some of the country’s
most popular programming and built many of the most watched and valued
networks in the industry. We are confident that we’ll be even stronger
together, and look forward to working with Jeff Zucker and the NBCU
team to deliver the best consumer experience.”

Jeff Zucker, current president and CEO of NBCU, will be CEO of the
new joint venture and will report to Burke. Zucker said, “Combining the
assets of NBCU, ranging from our suite of cable properties and two
broadcast networks to a legendary film studio and global theme park
business, with the content assets and resources of Comcast, will enable
us to continue to thrive in an ever-changing media landscape. Consumers
of all of our products – on screens large and small – will have the
benefit of enhanced content and experiences, delivered to them in new
and better ways as a result of this transaction. This marks the start
of a new era for NBCU, and I’m genuinely excited that I will be leading
this wonderful organization, along with the Comcast team, at this
important time in our history.”

Headquarters for the business will remain in New York. The joint
venture board will have three directors nominated by Comcast and two
nominated by GE.

Key Elements Of The Transaction:

• NBCU will borrow approximately $9.1 billion from third-party lenders and distribute the cash to GE.
• NBCU, valued at $30 billion, will be contributed to the newly formed
joint venture. Comcast will contribute its programming businesses and
certain other properties valued at $7.25 billion.

• GE will acquire Vivendi’s 20% interest in NBCU for $5.8 billion.
GE will purchase approximately 38% of Vivendi’s interest (or
approximately 7.66% of all outstanding NBCU shares) from Vivendi for $2
billion in September 2010, if the Comcast transaction is not closed by
then. GE will acquire the remaining 62% of Vivendi’s interest (or
approximately 12.34% of all outstanding NBCU shares) for $3.8 billion
when the transaction closes.

• Comcast will make a payment to GE of approximately $6.5 billion
in cash subject to certain adjustments based on various events between
signing and closing.

• The new venture will be 51% owned by Comcast and 49% owned by GE.
• GE expects to realize $9.8 billion pre-tax in cash before debt
reduction and transaction fees and after buyout of the Vivendi stake.
GE expects to realize approximately $8 billion in cash after paying
down the existing NBCU debt and transaction fees.

• GE will be entitled to elect to cause the joint venture to redeem
one-half of its interest at year 3 ½ and its remaining interest at year
7. The joint venture’s obligations to complete those purchases will be
subject to the venture’s leverage ratio not exceeding 2.75X EBITDA and
the venture continuing to hold investment-grade ratings. Comcast also
has certain rights to purchase GE’s interest in the venture at
specified times. All such transactions would be done at a 20% premium
to public market value with 50% sharing of upside above the closing

• To the extent the joint venture is not required to meet GE’s
redemption requests, Comcast will provide a backstop up to a maximum of
$2.875 billion for the first redemption and a total backstop of $5.750

The transaction has been approved by the Board of Directors of GE
and Comcast. It is subject to receipt of various regulatory approvals,
including clearance under the Hart-Scott-Rodino Antitrust Improvements
Act, and approvals of the Federal Communications Commission and certain
international agencies. The transaction is also subject to other
customary closing conditions. NBCU has obtained $9.85 billion of
committed financing through a consortium of banks led by J.P. Morgan,
Goldman Sachs, Morgan Stanley, BofA Merrill Lynch and Citi. This
financing is expected to receive solid investment-grade ratings from
S&P and Moody’s.

Comcast and GE intend to submit regulatory applications supporting
the pro-competitive and strong public interest benefits of the
transaction, including how the joint venture will better meet the
entertainment, communications and information needs of the American

“We are prepared to make affirmative commitments to ensure that the
pro-consumer and public interest benefits of the transaction are
realized,” Roberts said. “Today, we have announced a number of initial
commitments that expand on the capabilities that Comcast and NBCU have
built over the years, and the new opportunities that this combination
makes possible. These commitments address the needs of various
audiences and stakeholders, and we will provide additional details on
these and other commitments in our public interest filing with the
Federal Communications Commission.”

Morgan Stanley is lead financial advisor to Comcast with UBS and BofA
Merrill Lynch acting as co-advisors. Davis Polk & Wardwell LLP is
Comcast’s legal advisor. J.P. Morgan is lead financial advisor to GE
with Goldman Sachs and Citi acting as co-advisors. Weil, Gotshal &
Manges LLP is GE’s and NBCU’s legal advisor.


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