Comcast reportedly making bid for NBC Universal

So, the financial pundits all seem to think this is a dumb idea on Comcast's part. It seems like a good idea to me---for Comcast. What am I missing?

I think it's because the role of cable companies is not clear. They've made their business around delivering content over an expensive infrastructure, but many would argue that they're assuming the role of a "dumb pipe" provider, meaning data. Getting into the content business itself opens up a can of worms because they're also in the business of how that content is delivered.

Consider this: Cable has been allowed to exist as a natural monopoly because it's cost prohibitive to build competing systems in a municipality. Until recent years, there was no competition, and even now, the competition becomes the phone company. But only sort of, since the phone companies still have to open their physical plant to outside providers (DSL), something cable does not have to do.

You can see where that's all going. They're on the verge of exposing themselves to the kind of regulation phone companies do, their business is not clear, and there are serious concerns about owning content when you own the delivery mechanism. Any way you look at it, the future of cable is clear as mud. Over-leveraging yourself like this to buy a business that could bring down the regulatory hammer seems cosmically stupid to me.

BDesvignes said:
That's already happened with the Versus channel. Comcast owns it and Direct TV doesn't get it so I can't watch the Capitals games at most bars.

You have to give Gary (Who needs a deal with a major network?) Bettman and the NHL at least some credit for that one.

If Vivendi sells there stock and Blackstone picks up some of it doesn't that make them majority owner and then they can void current management contract with NBC Universal. That will let them buy seaworld/busch parks
and Blackstone/Merlin will majority run/own all the park in Orlando with the obvious exception of Disney Parks.

If Comcast Buys NBC Universal they may sell non core assets ie: the parks Who has the money to buy them ?

I see two or three different ways blackstone could end up with both Universal Studio's and Seaworld/Busch parks.

Jeff said:
I wonder if this would survive FCC scrutiny of all things. A cable company with huge market share, in both television and Internet offerings, owning a huge content company, raises a ton of red flags for me.

According to current FCC rules a local cable company can NOT own a local TV station if both are within the same city. While most cities do not have a local station that is owned directly by NBC some very large cities do such as Chicago and Philadelphia. In other words if the FCC for some reason would say yes to this deal then NBC would have to sell Chicago's channel 5 and Philadelphia's channel 10 because Comcast Cable serves those cities and with so many local TV station ownership groups having money woes right now ( some are already in bankruptcy ) and a number of others trying to get out of TV all together..NBC will have a very difficult time selling off those TV stations..that right there is why I believe this whole thing will be dropped like a hot potato.

^^The answer to your first question is no. First, understand that Univeral Orlando and NBC Universal are two different companies. Blackstone owns 50% of the Universal Orlando Resort. If Blackstone bought any stock from Vivendi it would merely make them a minority owner of NBC Universal. Thus, they would gain very little (if any) additional power in running Universal Orlando.

Now Blackstone/Merlin could offer to buy more interest (effectively controlling interest) from NBC Universal, regardless of who owns NBC Universal.