Comcast and General Electric announced a $37 billion joint venture today that combines Comcast's cable programming and online content with NBC Universal's (NBCU) varied businesses, including broadcasting, online content and cable programming.
The deal will be subject to federal regulatory reviews, expected to last at least a year, officials from the companies said in statements and during conference calls.
Comcast will own 51% of the entity, and GE (through its ownership of NBCU) will own 49%. Comcast will manage the venture, once it is approved. Few layoffs are expected as a result of the move. Comcast has about 100,000 workers today; NBCU has approximately 30,000, officials said.
A major focus of the joint venture will be on development and distribution of multiplatform media that can be received anytime and anywhere, Comcast CEO Brian Roberts said, though he offered few specifics. He said that NBCU's profitable cable networks will complement Comcast's distribution business and increase Comcast's ability to create content.
"At the same time, it will enhance consumer choice and accelerate the development of new digital products and services," Roberts said in a statement.
The joint venture didn't have an immediate name, but Comcast said it is creating the Comcast Entertainment Group to house its 51% share; It will operate alongside Comcast Cable, operator of the company's traditiona cable business.
Jeff Zucker, the CEO of NBCU, will serve as the CEO of the joint venture and report to Comcast Chief Operating Officer Steve Burke. Zucker noted that the combined entity will be able to develop content that can be viewed on both small and large screens. He called the venture the "start of a new era" as it brings interactive cable television to life, among other projects.
The officials declined to answer specific questions about their plans for emerging models of content distribution. Such models include video over the wireless Internet that could be received by a smartphone or other handheld devices. They did indicate a willingness to consider an array of subscription pricing plans for content, but also said they intend to preserve broadcast television that is ad-supported.
Such a balanced approach is expected to be key to gaining support for the venture from federal regulators.
The parties expect the venture to ultimately win approval from entities including the Federal Communications Commission. Ironically, the morning conference call with reporters was delayed by technical difficulties for about 15 minutes, a problem Roberts blamed on a "certain telecom provider and nobody in this room."