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  • NBC, Vivendi Universal complete merger

    NBC, Vivendi Universal complete merger

    MUMBAI: NBC and Vivendi Universal Entertainment (VUE) have completed the creation of NBC Universal, a global media and entertainment enterprise with expected 2005 revenues of $15 billion.The announcement was made today by GE and Vivendi Universal, the parent companies, respectively, of NBC and VUE.

    The formation of NBC Universal creates a media giant whose assets include brands such as television networks NBC, Telemundo, USA Network, Sci-Fi Channel, Bravo, Trio, CNBC, and MSNBC (jointly owned with Microsoft); film studio Universal Pictures; television production studios Universal Television and NBC Studios; a stations group comprising 29 NBC and Telemundo television stations; and interests in five theme parks including Universal Studios Hollywood and Universal Orlando.

    International assets include the sale and distribution of video and DVD titles, television programming, and feature films in more than 200 countries; and distinctive television channels across Europe, Asia, and Latin America.

    In completing the transaction, shareowners of VUE received $3.65 billion of cash consideration, of which Vivendi Universal received $3.4 billion. NBC Universal assumed $1.7 billion of debt, previously included in Vivendi Universal’s financial statements. As a result, GE owns 80 per cent of NBC Universal and Vivendi Universal controls the remaining 20 per cent. Beginning in 2006, Vivendi Universal will have the right to monetize its ownership interest over time at fair market value.

    Bob Wright, GE vice chairman and chairman and CEO of the new company, was quoted in a company release as saying: “As a highly integrated company with outstanding positions across a range of media, the new NBC Universal represents a tremendous growth opportunity for our viewers, advertisers, employees, and GE shareowners.”Jeff Immelt, GE chairman and CEO, said: “Closing NBC Universal is another important step in the transformation of GE. Strategically, this business will have an advantage in content, so valuable in the future of digital media.”

    Jean-Rene Fourtou, chairman and CEO of Vivendi Universal, said: “We are pleased to have an active and long-term ownership interest in NBC Universal, one of the world’s most profitable and fastest-growing media companies. This transaction gives Vivendi Universal a 20 per cent ownership interest in NBC Universal and at the same time enables us to record a total net debt reduction of approximately $6 billion.”

    CORPORATE HIERARCHY
    Ron Meyer, president and chief operating officer of Universal Studios, will be responsible for Universal Pictures, the Hollywood studio operations, and the company’s theme parks. Randy Falco, president of the NBC Universal Television Networks Group, will lead the company’s commercial and operational organizations. Jeff Zucker, president of the NBC Universal Television Group, will oversee all television programming for the new company, with the exception of Sports and Olympics. Dick Ebersol, chairman of NBC Universal Sports & Olympics, will assume responsibility for USA Network’s sports programming, and Jay Ireland, president of NBC Universal Television Stations, will continue to lead the operations of the company’s owned-and-operated stations group.

    One fallout of the media merger of course is the expected loss of 300 jobs. The job cuts are seen as inevitable as there is bound to be some operational overlap in areas like cable TV. 

  • Al Gore close to hatching deal with Vivendi

    NEW YORK: When NBC finalised the deal to buy Vivendi Universal Entertainment [VUE] many thought that Al Gore’s aim of launching a news channel to counterbalance Fox News’s conservative bias had come to an end. Those people might have to do a rethink.
    The former US VP is said to be near striking a $70 million deal to acquire Newsworld International. This is a small cable network owned by Vivendi Universal.
    Media sources have indicated that Gore and his backers want to turn the digital channel into a liberal-leaning network. His partners include ex-Democratic fund-raiser Joel Hyatt and media investment banker Steve Rattner, who’s said to be lining up financing.
    A report in the New York Times states that NWI is carried in only 20 million homes, NWI airs newscasts from around the world, including reports from the Canadian Broadcasting Co. Theoretically Gore could gut the channel for its bandwidth and reformat it for his own purposes. Interestingly Barry Diller, who sold the property to Universal had originally planned to transform . His vision was for a hipper, edgier news channel that could be an non-ideological answer to Rupert Murdoch’s Fox News.
    It is possible that Vivendi could get the nod to sell NWI to Gore as part of a potential deal with NBC. Until now NBC has not tendered any cash with its partnership offer.

  • Battle over VUE assets ends in NBC’s favour

    MUMBAI: The protracted three-month old battle between various media firms over the assets of Vivendi Universal Entertainment has come to a close. As expected, NBC has walked away with the spoils.
    At the time of filing, the two parties were in a meeting to ink a letter of agreement for a deal which will reportedly bring in $3.8 billion in cash to the cash-strapped Vivendi and an additional $1.2 billion in assumed debt. Reuters has valued the deal for Vivendi at approximately $13.6 billion.
    The new entity is to be called NBC Universal, making it the third largest media company in the world after Walt Disney Co. and Viacom in that order. Rupert Murdoch’s News Corp. Ltd. will now come in at Number 4.
    Vivendi will merge assets including Universal film studios and the five theme parks, as well as the USA and Sci-Fi TV networks – with NBC.
    All this of course indicates that Vivendi is keen on staying in the media business for a while longer. Earlier, there was talk that it would restrict itself to just the music segment. The broadcaster’s parent General Electric will have a 80 per cent stake in the company. The troubled French media group will have the minority 20 per cent stake. Since Vivendi has reportedly valued its 20 per cent stake in the future NBC Universal group at $9 billion, the total value of the company therefore stands at $ 45 billion.
    The new company is expected to generate $13 billion in annual revenues and $3 billion in operating cash flow.
    As reported earlier by iIndiantelevision.com, the deal will enable NBC to look beyond just the other broadcast networks ABC, CBS, Fox and take on their owners Disney, Viacom and Rupert Murdoch’s News Corporation. Analysts have noted that the deal will allow NBC access to more programming without difficult negotiations with its competitors. Reports indicate that the deal makes sense in the US where the new regulatory environment no longer separates production and broadcasting. The proposed merger, which is expected to be completed by end-September is also expected to pass through European Union regulatory scrutiny without a hitch.
    It is however doubtful as to whether NBC sees a great deal of value in the theme park arena. In all probability it will operate them until an attractive exit is found.
    While NBC has been in the forefront for a while now the former owner of Universal Edgar Bronfman Jr who sold out to Vivendi three years ago and who is on Vivendi’s board of directors had still held out hopes of a deal going in his favour. He has however finally resigned to losing out. MGM was one of the first parties to pull out of the race for the VUE assets. The other serious suitiors at one time or another included Liberty Media, Viacom and cable company Comcast.
    But this does not mean that Bronfman has totally de-linked from making a play for Vivendi assets. Still up for grabs is Universal’s music assets Universal Music Group which is not part of the current deal. It is seen as a straight play with none of the complexities that this deal came with and will be a more straightforward pitch for Bronfman.

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    NBC expected to clinch deal for VUE assets

    NBC emerges as front runner in Vivendi US showbiz deal