Vivendi-GE Sign to Create NBC Universal

Reuters | October 8, 2003

[HAL9000]

PARIS (Reuters) - French media firm Vivendi Universal and U.S. conglomerate General Electric said on Wednesday they had signed a final deal to combine GE's NBC television unit with Vivendi's Universal Studios and cable channels, creating a $43 billion entertainment powerhouse.

Under a deal whose broad outlines were unveiled last month, shareholders in Vivendi Universal Entertainment will receive $3.8 billion in cash, with $3.3 billion of that going directly to Vivendi Universal.

As part of the agreement, GE intends to issue common stock at or before the closing to fund the cash portion of the deal. NBC Universal will assume about 1.7 billion euros of debt.

The new company, to be called NBC Universal, will compete with entertainment giants such as Walt Disney Co. and Viacom Inc..

From 2006, Vivendi Universal will have the option of selling or otherwise monetizing its ownership at fair market value. The companies said they had identified $400 million to $500 million in potential synergies.

The deal will help Vivendi Universal cut its debt to less than 5 billion euros by the end of next year, Vivendi Universal Chief Executive Jean-Rene Fourtou said in a statement.

The two companies said the new company would have 2003 revenues of more than $13 billion, and annual earnings before interest, taxes, depreciation and amortization of almost $3 billion.

[HAL9000]

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[Lefty-NiceGuy]

So Americans can now get their network news from Dan Rather, France or Walt Disney.

BBC and other public run stations here in Germany give me relatively high quality independent news compared to that in the US. I'd suggest the same could be done for the US. I'm not sure they can be justified in a conservative world view though. Can they?

At least even republicans in congress are pushing back the FCC changes to ownership laws.

Check this chart out to see how bad media consolidation has become.

[mhking]

same could be done for the US. I'm not sure they can be justified in a conservative world view though.

Quality? Sure. But let's go one better. Why should they? There are a myriad of sources, and when you add the web into the mix, that number grows even more.

[ido_now]

NEWS FLASH: GE has agreed to acquire DIS and SONY and 43,017 other news and entertainment sources.

In respose to this move FCC Chairman, Powell has said, "Communications diveristy is essential to provide everything that the American people require."

In a related story, Rupert Murdock, in another effort to provide diversity, has denied that he intends to make a tender offer for GE after they have acquired 63.5% of all media. He has said all along, if there is only 0.000035% of the media that is not "Fair and Balanced" I will be satisfied."

[laredo44]

At least even republicans in congress are pushing back the FCC changes to ownership laws.

So big is bad when applied to non-coercive private enterprise, but big is good when appiled to coercive government?

[Lefty-NiceGuy]

Quality? Well, internal stations in Germany have their charters and heads of staff reviewed periodically by governments local and national. So the Bavarian station is for example more conservative and others are more liberal, but since everyone can watch all of them, they keep each other honest. There are also the private stations too, and other coutries' stations. The Swiss news tends to be pretty neutral. I didn't think it would work well when I first heard about it, but I can't argue with success.

The general idea behind public stations is to keep big conglomerations from buying off the media. The problem with donation run stations like PBS in the states, is that a big donor can buy off them off some too.

Why should they? There are a myriad of sources, and when you add the web into the mix, that number grows even more.
Well most people still watch TV, and you can't believe everything on the web. If the media is consolidated into just a few companies, there is fundamental threat to democracy.

An interesting example: from what I hear there has been almost no mention of the FCC changes in the US press. They've agreed to bury that story.

[Lefty-NiceGuy]

Don't take my word for it read this from Trent Lott's homepage: Media Ownership :
Having one huge national media chain dominate both the local print and broadcast sectors of individual markets means less competition and less incentive to serve media consumers and advertisers with quality service at good prices.

[laredo44]

Having one huge national media chain dominate both the local print and broadcast sectors of individual markets means less competition and less incentive to serve media consumers and advertisers with quality service at good prices.

Tell me how markets work. In particular, I'm interested in how competition is constraigned over time. Name the companies that have retained virtual monopolies over, say the last 50-75 years in any area. Your concern is over-wrought. Consolidations are beneficial (think Windows) and only last for relatively short periods. Competition assures us of that.

[OldFriend]

A french speaking mickey mouse is more like it.

[Lefty-NiceGuy]

Consolidations are beneficial (think Windows)
I'm thinking windows sucks, and Microsoft uses it to leverage all sorts of unfair advantages. Remember how they screwed Borland. Remember what they did to Java. Sorry I can't assume everyone is a programmer, but jeez those guys pissed me off. Most of all it upsets me how cool they could be, how much good they could do for the industry with all that money and talent.

Name the companies that have retained virtual monopolies over, say the last 50-75 years in any area.
AT&T comes to mind (no I won't go back to the 1800s), they had to be broken up by congress. It was a good move.

I'm interested in how competition is constraigned over time.
If one group controls a) the media, b) your computer, and c) the communication lines, it's different then some guy owning the rail system. This group can steer a democracy anyway it likes. The public won't care, because they'll be told not to. I can see these battles being fought on all three fronts. If we loose all three, it'll be like the Ministry of Truth in 1984.

[mhking]

And though they don't broadcast domestically, the Voice of America's radio and television networks do qualify as commensurrate state operated news sources. The quality of the work from VOA is arguably on par with Deutsche Welle or ABC Australia or CBC or the BBC.

We simply don't see it due to rules enacted by the federal government.

[mhking]

You get no arguement from me on media consolidation - at least in terms of a monolith like Clear Channel in the radio arena. But the proliferation of sources on television (both cable and broadcast) as well as internet-based sources would belie that arguement rather quickly.

Certainly most arguements regarding monopolistic consolidation of the media are specifically pointed at Clear Channel and their gargantuan hold on the radio audience across the nation. There are many - myself included - who feel that the music business has stagnated in most formats, due to the 800-pound Clear Channel gorilla and those other large firms who compete directly with them (Cumulus, Infinity, Cox, Radio One). Most people know that to find truly "new" music, you need to listen to college radio or go onto the internet any more. Until CC can be convinced that they are losing market share, that model won't change. CC (unfortunately) drives radio in this country, and thanks to their massive presense, this position won't change any time soon.

All those things being present, it (CC's massive presense) does not have anything to do with your points regarding news.

[laredo44]

I'm thinking windows sucks

Compared to what? Microsoft has given us so many good standards it's probably impossible to measure the true value. It's like the QWERTY keyboard. The standard is more valuable than the item itself.

AT&T comes to mind (no I won't go back to the 1800s), they had to be broken up by congress. It was a good move.

I agree it was a good move, but it was also the government that gave the company the monopoly in the first place. AT&T did much good getting the industry rolled out to the country. We're much better than Europe on that score where lack of standards and local squabbling retarded phone use and inflated the price.

If we loose all three, it'll be like the Ministry of Truth in 1984.

Perhaps, but only for a short time. That's my point. Liberals had unimpeeded control of the press for decades, but it was exactly that control the led to the rise of talk radio and internet news. Competition finds a way around those things, and I think that is a good thing.

[Young Rhino]

Maybe they can merge with AOL too. I understand the name is available. :-)

[Lefty-NiceGuy]

I agree it was a good move, but it was also the government that gave the company the monopoly in the first place.
Oh, were they a state sanctioned monopoly?

We're much better than Europe on that score where lack of standards and local squabbling retarded phone use and inflated the price.
Here in Germany the telephone system grew out of the postal service and was until fairly recently state run. I has been privatized and the goverment forces them to allow competition in. It's not as terrible as it was in the 80s. So on one side privatization (righty idea) was the key, but on the other side government intervention (lefty idea to some) forced them to let in compeditors. Both had to happen. Now our service is about the same as the US (except for maybe customer service).

Ok, I don't want to be alarmist here about the whole 1984 deal, but there is something to worry about. Yes I'd like to think competition or good human nature or what ever will make it impossible. It's still something to worry about with things from Clear Channel to Mic$oft's Digital Rights Management.

Back to the topic: Conservative viewpoint
Consolidation of power is bad.
Consolidation of the press is bad.

So that leaves us having to give some limited power to the state to break up power elsewhere.

[KevinDavis]

I wonder what is going to happen with the Sci-Fi channel? Better progarms maybe?