Comcast-NBC deal pushed into the new year
The cable giant says regulators will not approve its deal to buy a controlling stake in NBC Universal by year's end. It is now hoping to close it in January.
Comcast today said its proposed deal to acquire control of General Electric's NBC Universal won't get regulatory approval by the end of the year, as the company had hoped.
The cable giant issued a statement saying that even though the Federal Communications Commission and Department of Justice have made "substantial progress toward approval," it simply doesn't have enough time this year to complete the transaction, which was announced at the end of 2009.
"Because of the lead time required to prepare for a close, it now appears that we will not be able to close the transaction with GE relating to NBC Universal by year-end," Sena Fitzmaurice, a spokeswoman for Comcast, said in a statement. "We have notified our transition teams that there will not be a December 31 closing."
Comcast believes that the review process is on track for the deal to close in January 2011. Reuters reported that NBC Universal Chief Executive Jeff Zucker, who will leave the company, once the deal is complete, sent a memo to staff on Wednesday reiterating Comcast's hope that the deal will close in January.
The company announced its plans to buy NBC Universal from General Electric a year ago this month. The deal would create a media giant worth about $37 billion, combining Comcast's cable channels and NBC's television, movie, and theme park assets.
Regulators have been examining the deal for months, paying particular attention to the companies' online-video distribution, program access, and program carriage, according to Reuters.
Regulators and opponents of the merger are concerned that the combination of Comcast and NBC could stifle the nascent online-video market. NBC Universal is part-owner of the video site Hulu, along with News Corp. and Walt Disney.
Regulators are also concerned that Comcast could abuse its power by using new channels it has acquired from NBC Universal to gain an unfair advantage in program negotiations with pay-TV subscribers. NBC Universal includes networks such as USA, Bravo, and MSNBC.
Some of Comcast's competitors and rivals have pushed regulators to impose conditions on the merger. Earlier this month, Level 3, a tier 1 backbone provider that connects to Comcast to deliver video and other traffic to Comcast customers, asked the FCC to impose Net neutrality conditions on the merger.
Level 3, which had been negotiating with Comcast, said the cable operator is trying to force it to pay for delivering video traffic on its network. Comcast has said Level 3's claims are unfounded and that the issue is a simple peering dispute.
Under terms of the acquisition, Comcast will control 51 percent of NBC Universal, once the deal is complete.