I’ve got some more detail on Comcast-GE-NBC. The 290-page “Project Crimson”, which has been the deal’s code name from the beginning, was delivered to legal departments yesterday. All sides agreed Friday to the transaction’s financials after the rough framework was okayed a month ago. Barring some last-minute holdup from Vivendi regarding the sale of its 20% NBCU stake, “It’s a done deal”, an insider tells me. “Nothing has been signed yet. But it’s quite close. There’s still lots of really complicated structural issues — tax and indemnity shit. But not fundamental deal issues.” Another step forward is that Comcast just got GE to agree there wouldn’t be any conversations with anybody else about NBCU for a week beginning yesterday. Obviously, Comcast took seriously those reports that Rupert Murdoch’s News Corp was circling more closely and might be a bidder. “That’s an indication the deal is getting done,” an insider confided to me. Expectations are that the regulatory okay will take 14 months to obtain, and the handoff should take place at the beginning of 2011.
Comcast remains cagey about what it plans for Jeff Zucker and Ron Meyer, and the rest of the NBCU bigwigs. I’ve reported that Comcast No. 2 Steve Burke who’ll be overseeing NBCU was saying he’d move out Zucker a few months. Other media outlets have been reporting that Zucker will be retained. Today, I heard from an insider regarding Zucker’s fate that “the last thing Comcast wants to do is indicate anything one way or another. There’s still 14 months to go. Comcast will do what’s smart and be supportive of Jeff over that time and get to know him and then make a decision.” Same goes for Ron Meyer. “I don’t think they have opinions about anybody right now.” (Actually, I think the truth is more like Comcast doesn’t want anybody to express opinions about the NBCU folks right now and poison what is going to be a long pre-takeover process.)
But here’s another interesting detail: I understand that Comcast is less likely to jettison Universal Studios than NBC’s troubled broadcast network. “The studio is of more interest to them than the network is,” an insider explains to me. “Everyone would get rid of the network because, basically, this is a deal to buy a bunch of cable channels. The problem is that nobody thinks the network is saleable. It loses a huge amount of money right now.”
Meanwhile, GE’s Jeffrey Immelt and Comcast’s Brian Roberts will be speaking back to back at the 2-day NYC financial conference held by private equity firm Quadrangle on Wednesday and Thursday. It’s a very hush-hush confab that excludes media unless they’re moderating panels. So expect Immelt and Roberts to explain to Wall Street why the $30B deal makes sense for their shareholders. So let’s go over the financial terms one more time: Vivendi would have to sell its 20% NBCU stake to GE. NBCU is set up as a new joint entity controlled 51% by Comcast and 49% by GE. Comcast contributes all its cable channels like Golf and Versus and E! and Style, plus $6B to $7B in cash, to the new entity. In turn, GE puts in its 80% ownership of NBCU plus Vivendi’s 20% (which it hopefully controls by then), as well as $8B to $10B in debt, to the new entity.
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