The Merger: Comcast and NBC

On Thursday, Comcast, the largest cable company in America, announced a deal to take control of NBC Universal, and the announcement redrew the map of the media industry. The company that delivers television into tens of millions of homes was buying the company that makes the television, and the combination was the biggest bet yet on the future of the screen. The deal was the year's biggest media story, and the bigness was the point. The deal is the December 2009 story, and the story is the lesson: when the pipes and the content come together, the industry changes shape.

The Merger is the subject of this article: what the deal is, what it combines, what the critics fear, and why the media world is consolidating. The announcement came on Thursday, December 3, and the regulators are gearing up for a long look. The lawyers are ready, the opponents are organizing, and the review is the next chapter. This is the story of the merger, and the story is about the marriage of content and distribution.

1. The Deal

The deal was the biggest in the history of the cable industry, and the bigness was the headline. Comcast would acquire a majority stake in NBC Universal from General Electric, valuing the media giant at around thirty billion dollars. Comcast would contribute cash and its own cable channels to a new joint venture, and General Electric would keep a minority stake for a time. The structure was the complexity, and the complexity was the scale. The lawyers would spend months on the details, and the details were the deal.

The deal was also the exit. General Electric had owned NBC Universal for five years, and the ownership had been the side project of an industrial giant. The company was selling, and the selling was the relief: the media business had served its purpose, and the focus was moving back to the machines and the finance. The sale was the divestment, and the divestment was the strategy. The deal was the handoff, and the handoff was the story. The buyer was the cable giant, and the seller was the industrial giant, and the exchange was the new order.

2. The Buyer

The buyer was the pipe, and the pipe was the power. Comcast was the largest cable company in the United States, connecting more than twenty million homes to television and internet, and the connections were the foundation of the empire. The company had grown by acquisition, buying systems and markets, and the growth was the pattern of the industry. The acquisitions were the history, and the history was the habit.

The buyer was also the ambition. Comcast had spent years as the distributor, the company that carried other people's channels, and the carrying was the ceiling. The deal was the climb: from the pipe to the content, from the delivery to the creation, from the middleman to the owner. The company wanted to be the one that made the shows and delivered the shows, and the wanting was the strategy. The ambition was the strategy, and the strategy was the future. The pipe was the base, and the base was the launchpad. The buyer was the giant, and the giant was reaching up. The reach was the biggest gamble in the company's history, and the gamble was the measure of the moment.

3. The Target

The target was the crown, and the crown was the content. NBC Universal was one of the great media companies of the world: the NBC broadcast network, the cable channels of USA, CNBC, and MSNBC, the Universal movie studio, the theme parks, the libraries of film and television. The pieces were the portfolio, and the portfolio was the treasure. The brands were the legacy, and the legacy was the value.

The target was also the transition. The broadcast network was aging, the ratings were sliding, and the future of television was the question mark. But the cable channels were strong, the studio was strong, and the libraries were forever. The movies kept their value, the shows kept their audiences, and the keeping was the strength. The company was not dying; the company was changing, and the changing was the opportunity. The target was the prize of the deal, and the prize was the content. The crown was heavy, and the heaviness was the history.

4. The Combination

The combination was the logic, and the logic was the vertical. The new company would own both the content and the pipes: the shows and the channels and the movies, and the cable systems that carried them into the home. The combination was the dream of the media industry, the dream of controlling the whole chain from the studio to the sofa. The dream had been tried before, and the trying was the history of the industry.

The combination was also the promise. The merged company could invest in programming with the confidence of the distributor, could launch channels and know they would find carriage, could bundle the content with the subscriptions. The synergies were the sales pitch, and the sales pitch was the deal. The executives talked of the savings and the growth, and the talk was the argument. The combination was the bet that the whole was worth more than the parts, and the bet was the reason the price was paid. The vertical was the vision, and the vision was the value.

5. The Fear

The fear was the conflict, and the conflict was the concern. The critics asked the question that hung over the deal: would Comcast favor its own channels and starve the competitors? The company that owned both the content and the pipe would have the power to decide what the viewers saw, and the power was the worry. The concern was the net neutrality debate, the debate about whether the pipe should treat all content equally. The debate was the background, and the background was the tension.

The fear was also the precedent. Comcast had been found to violate the principles of net neutrality the year before, the reports reminded, and the finding was the evidence of the temptation. The company promised to keep the distribution open, promised not to discriminate, promised the regulators that the deal would not change the behavior. The promises were the reassurance, and the reassurance was the negotiation. The skeptics heard the promises and remembered the past, and the remembering was the doubt. The fear was the shadow of the deal, and the shadow would follow it through the review.

6. The Regulators

The regulators were the gate, and the gate was the hurdle. The deal needed approval from the federal communications commission and the antitrust authorities, and the approval was the question of the year ahead. The hearings, the filings, the conditions, the months of review: the process was the price of the bigness. The process was the gauntlet, and the gauntlet was the test.

The regulators were also the debate. The commissioners would ask whether the combination helped or hurt the viewers, whether the competition would survive, whether the internet would stay open. The questions were the ritual of the media mergers, and the rituals were the gauntlet. The company would argue, the opponents would argue, and the decision would come. The conditions would be written, the promises would be extracted, and the deal would be shaped. The gate was the uncertainty, and the uncertainty was the deal. The announcement was the beginning, and the beginning was the long road.

7. The Industry

The industry was the context, and the context was the consolidation. The media world was shrinking into fewer hands: the telephone companies had merged, the cable companies had merged, and now the cable and the content were merging. The pattern was the logic of the scale, the logic of the distribution and the programming and the advertising all needing bigness. The bigness was the survival, and the survival was the rule. The rule had been written over the previous decade, and the writing was the history of the industry.

The industry was also the transition. The television was changing, the internet video was rising, the young viewers were cutting the cord in small numbers, and the old model was under pressure. The deal was the response, the answer of the giants to the change: bigger, broader, more control. The other media companies watched and measured their own options, and the watching was the movement. The industry was the river, and the deal was the bend. The consolidation was the tide, and the tide was the direction. The merger was the move of the moment, and the moment was the movement.

8. The Lesson

The lesson of the deal was about the chain, and the chain was the control. The media business was a chain from the creation to the delivery, and the companies that owned the most links owned the most power. The deal was the latest step in the long march of the industry toward the vertical, and the vertical was the point. The lesson was that the pipe and the content were converging, and the convergence was the future. The future was the reason, and the reason was the deal.

The lesson was also about the screen. The television was still the biggest screen in the home, and the biggest screen was the prize. The internet was coming for the screen, and the giants were building their defenses. The deal is the December 2009 story, and the story is the lesson: when the pipes and the content come together, the industry changes shape. The announcement came on Thursday, and the regulators would decide the rest.

Tags

#business #technology