After more than a year, it appears that Comcast's (Nasdaq: CMCSA) deal to acquire control of NBC Universal from General Electric (NYSE: GE) is about to be blessed by federal regulators. In fact, the necessary imprimatur from the Federal Communications Commission and the Justice Department could be handed down this week.
Under its terms, Comcast will pay $13.8 billion in cash and other assets to GE in exchange for 51% of NBC Universal. The result, assuming the combination is approved, will be a media giant that will include Comcast's approximately 23 million cable subscribers and 17 million Internet customers, along with its cable channels, such as E! Entertainment and the Golf Channel, and its Xfinity online video service.
NBC Universal's contributions will include the NBC and Telemundo broadcast networks, such major cable channels as Bravo and Oxygen, and the Universal Pictures film studio. Also included will be NBC's 30% stake in Hulu.com, an online broadcast service.
Observers expect the deal to be approved by positive votes from four of the commissioners, with a single thumbs-down from Michael Copps. Also working to squelch the combination has been Sen. Al Franken (D-Minn.), who in e-mails has predicted that the merger would be a "disaster" for consumers.
In order to gain the expected approval, however, Comcast has had to acquiesce to several conditions proposed by the regulators. For instance, it'll likely be required to increase the space on its cable system for independently owned channels, to assure the continued independence of NBC news, and to maintain NBC programming on free TV channels.
As a means of placating those objecting to the deal, with a few exceptions, the conditions will remain in place for seven years, rather than the usual three- to five-year periods. For instance, Comcast will likely be required to provide Internet-only options for three years at $49.95 a month.
Furthermore, to protect the likes of online providers Apple (Nasdaq: AAPL) and Netflix (Nasdaq: NFLX), the newly combined company will apparently be required to provide those companies with content, assuming they have already cut deals with another content provider such as Disney (NYSE: DIS) or News Corp. (Nasdaq: NWSA). And finally, in a controversial decision, the net-neutrality rules that prevent companies from actively managing Internet traffic appear to have been dropped under the proviso that Comcast police itself in this area for seven years.
As one who has watched Comcast -- and indeed the entire media industry -- for nigh onto a decade, I must confess to positive conclusions about this imminent combination. In fact, I'm convinced that the new venture will result in a powerful media entity that will benefit from Comcast's solid management team. As such, it appears that Foolish investors would be well advised to closely monitor this new entity.
