The deal for Comcast to form a joint venture with GE that would give Comcast majority control of the NBCU collection of TV networks, Universal movie studio and theme parks ran into a French snag this week. Vivendi, which still owns the 20% of NBCU that it kept when it sold the Universal studio to NBCU, is apparently balking at the price it would get for its share.
Unconfirmed reports had Comcast contributing $4 billion to $6 billion plus cable channels like E Entertainment to get controlling interest in the unnamed venture and GE contributing its 80% share of NBC Universal and also $12 billion in debt. The snag is the amount that would be paid to Vivendi, which still owns all of Universal Music.
In the meantime some Wall Streeters said Comcast would be worth a lot less if the deal goes through. Isn’t the question whether Comcast or GE would manage NBCU more effectively in the long term?
If the Internet continues to deliver more and more video entertainment and information to consumers and if technology, such as what Intel, ARM, Adobe and others are developing, can show it on any TV set or mobile device, the value of a pay-TV service would decline just as has happened with residential wireline phone service. Offsetting the decline would be increased revenue from broadband as consumers will need higher speeds for multiple streams of HD and 3D video.