The joint venture will consist of the NBC Universal businesses and Comcast’s cable networks, regional sports networks and certain digital properties and certain unconsolidated investments.
A portfolio of cable networks and regional sports networks will account for about 80 percent of the new venture cash flow, including USA, Bravo, Syfy, E!, Versus, CNBC and MSNBC. The campanies assure the joint venture will be financially strong “with a robust cash-flow-generation capability.”
GE will contribute to the joint venture NBCU’s businesses valued at $30 billion, including its cable networks, filmed entertainment, televised entertainment, theme parks, and unconsolidated investments, subject to $9.1 billion in debt to third party lenders.
Comcast will contribute its cable networks including E!, Versus and the Golf Channel, its ten regional sports networks, and certain digital media properties, collectively valued at $7.25 billion, and make a payment to GE of approximately $6.5 billion of cash subject to certain adjustments based on various events between signing and closing.
According to Jeff Immelt, GE Chairman and CEO, the combination of Comcast’s cable and regional sports networks and digital media properties and NBCU will deliver strong returns for GE shareholders and business partners.
“NBCU has been a great business for GE over the past two decades. We have generated an average annual return of 11 percent, while expanding into cable, movies, parks and international media. We are reducing our ownership stake from 80 percent to 49 percent of a more valuable entity. By doing so, GE gets a good value for NBCU. This transaction will generate approximately $8 billion of cash at closing with an expected small after-tax gain,” he said.
Comcast also announced the creation of Comcast Entertainment Group (CEG), which will house Comcast’s interest in the joint venture and will stand alongside Comcast Cable, which operates the company’s traditional cable business.
Headquarters for the business will remain in New York. The joint venture board will have three directors nominated by Comcast and two nominated by GE.
Jeff Zucker, current president and CEO of NBCU, will be CEO of the new joint venture and will report to Steve Burke, Comcast Chief Operating Officer. Zucker said, “I’m genuinely excited that I will be leading this wonderful organization, along with the Comcast team, at this important time in our history."