Zucker discusses Comcast deal

Media conference looks at the implications

Perhaps the best thing about the prospect of NBC Universal joining forces with Comcast is that the cable giant is a pure media company with a “singular focus,” NBC U chief exec Jeff Zucker told an investor confab Monday.

General Electric folks “have been very good stewards for this business…They have been willing to step up for us,” Zucker said at the UBS Global Media Conference. But Zucker is anticipating a level of focus on the nuts of bolts of NBC U’s biz that GE could not offer. “Comcast is a media company at its core…and that is incredibly exciting for NBC Universal,” he said.

The Peacock’s rivals are less than thrilled at the $37.5 billion merger, unveiled Thursday in a pact that calls for Comcast to acquire 51% of NBC U from GE.

“There are some concerns we will have to explore,” said Viacom CEO Philippe Dauman. “They (Comcast) are a big customer of ours, and we have a lot to offer to all of our customers on a level playing field. And if we have a level playing field we’ll be fine.”

Zucker and Dauman, along with Comcast toppers Brian Roberts and Steve Burke, News Corp. chief operating officer Chase Carey and other media luminaries spoke on the first day of the UBS confab. The buzz at the event was all about the Comcast-NBC U hook up, and whether content and distribution make good bedfellows.

There’s a digital revolution going on “and everyone wants to know how it ends up. It’s hard to know when you’re in the middle of it,” said Zucker.

Comcast is the nation’s largest cable operator. And big chunks of its nearly 24 million cable customers also subscribe to high-speed Internet and telephone service. When the deal closes in nine to 12 months it will also own the NBC broadcast assets, a group of stellar cable networks including USA, Syfy, and Bravo, and Universal Studios.

“Just because content and distribution hasn’t worked in some situations doesn’t mean it’s not a good idea,” Zucker insisted.

Carey, who recently rejoined News Corp. after six years of running satcaster DirecTV, came out swinging over retransmission consent fees for broadcast stations. He said Fox’s O&Os deserve to see cold hard cash on par with ESPN’s $4 per sub, and cable and satellite distributors should stop whining and open their wallets.

“We put up the highest-rated programming there is,” Carey said. “We’re not looking to pick fights but the reality is we need to have a business model that lets us compete with the ESPNs and USAs…We’ll probably have some noise around it.”

He said he knows all the opposing arguments since he sat on the other side at DirecTV until a few month ago.

“I understand they want healthy profit margins year in and year out. But the reality is we put programming on and it’s competitive with other content that’s on the air,” he said.

Carey agreed with Zucker’s premise that content and distribution assets should work well together in the digital era, but he added a caveat: They can work well together only if they’re managed together, “not on an autonomous basis. Sibling relationships can be the most difficult.” He said someone needs to bang heads together “and make everyone understand what those opportunities represent.”

That’s just the kind of coziness that worries rival content providers.

According to Dauman, Viacom’s cable channels command 20% of the cable viewing audience, but only 8%-9% of affiliate fees paid by cable, satellite and telco distribs. “So there’s clearly an imbalance there,” he said. Without naming names, Dauman said he generally doesn’t see that disparity in cases when networks and distributors have the same owner.

“Comcast is obviously a dominant distributor, and when you have a dominant distributor that has exercised its dominance over a period of time you have to examine the transaction, and we will,” he said.

In an unusual change of pace for an investor conference, Dauman was interviewed by former Disney topper Michael Eisner, instead of the media analysts who conducted most of the sessions.

Eisner asked why Viacom hadn’t been snapped up, given its appealing content. Dauman said, not surprisingly, that chairman Sumner Redstone wouldn’t sell.

“It’s no secret that Sumner enjoys, as he should, ownership of Viacom, and it was not available,” Dauman told Eisner.

Comcast CEO Brian Roberts and chief operating officer Steve Burke reaffirmed their commitment to the NBC broadcast network and stations, which have been the laggards among NBC U’s mix of broadcast and cable assets. Zucker, who will report to Burke when the merger is completed, said new management at the network, more investment in development and an upswing in the ad market will likely result in brighter days for the broadcast biz.

But cable is clearly the place to be. And Roberts had no problem acknowledging that NBC U’s worst performing cable network still earns more than Comcast’s top three nets put together.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Film News from Variety