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NBC sale tale discounted

Expect a new flurry of conjecture regarding the sale of NBC in the wake of a published report that parent General Electric is looking to spin off the network’s entertainment division.

The report, part of a wide-ranging New Yorker profile of NBC and ABC by “Three Blind Mice” author Ken Auletta, recycles longstanding rumors that GE — unable to sell all of NBC for its asking price of $ 3.5 billion to $ 4 billion — might try to parcel off the network.

The article, which drew considerable attention in the consumer press but is generally viewed by industry insiders as containing few surprises, also raised questions about the future of Capital Cities/ABC with the anticipated retirement next year of president-CEO Dan Burke upon his 65th birthday.

Observers point out that a network, by itself, is worth relatively little without the major-market station groups owned by each of the Big Three. Otherwise, the actual “network” is really only a roster of affiliation agreements with stations across the country to carry that web’s programming.

Under Auletta’s scenario regarding NBC, a buyer would obtain access to the web’s 22 hours a week of prime time for somewhere between $ 500 million and $ 1 billion without assuming the overhead — such as news and sports divisions — associated with running a network.

The story, however, merely continues at least two years of speculation that GE would sell all or part of NBC. A widely circulated scenario at one point had the network being split up, with Paramount Communications acquiring the entertainment division, Turner Broadcasting (which owns CNN) taking the news and sports divisions and GE keeping the stations.

Other reports have suggested NBC would broker individual nights to studios, letting the studio supply all programming for that night and assume the risk selling advertising. Paramount was again mentioned there and in connection with rumors NBC would pare down its prime time lineup to facilitate a studio sale, circumventing the Financial Interest and Syndication Rule, which defines a network as a nationwide service airing more than 15 hours a week in prime time.

GE and NBC officials have consistently declined comment regarding sale speculation and privately have dismissed some of the more outlandish stories.

Several would-be investors have reportedly talked with GE chairman John Welch and NBC president Robert C. Wright, among them QVC Network chairman Barry Diller and Bill Cosby.

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