Comcast Shoring Up Support for NBCU Deal
Comcast’s efforts to shore up support for the cable operator’s planned purchase of control in NBC Universal bore much fruit last week, with six Latino groups supporting the deal (CD July 1 p14), now also backed by affiliates of the Big Four broadcast TV networks. Late Thursday, Comcast told the FCC it backed five conditions the affiliate groups of ABC, CBS and Fox sought (CD June 23 p3) for the cable operator to distance itself from NBC Universal-owned station carriage deals. Affiliate-group executives said they'll support Comcast-NBC Universal as long as the FCC mandates the conditions in signing off on the multi-billion dollar deal.
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Comcast so far has made limited concessions to gain support from those affiliate groups and NBC’s affiliates (CD June 11 p14) and non-profit groups, industry executives and lawyers said. It’s a wise move to quell potential opposition to the deal as the FCC and Department of Justice reviews are still somewhat early-on, they said. Such moves don’t necessarily portend the conversion of all-out opponents of the deal to backers. A Comcast spokeswoman didn’t reply to a message seeking comment.
For seven years after the NBC Universal transaction, Comcast agreed Thursday to “arms-length, good faith negotiations of retransmission consent agreements” between it and ABC, CBS and Fox affiliates, the filing said, http://xrl.us/bhqm2w. Provisions include not discriminating on the basis of affiliation with the NBC or Telemundo networks and not trying to gain a competitive edge by discriminating against non-NBC Universal stations in technical matters such as changing channel positions, downconverting digital or HD signals to analog or standard definition or lowering resolution, http://xrl.us/bhqm28. “Comcast’s cable system affiliates will remain solely responsible for negotiating retransmission consent agreements,” the company said. NBC Universal will “remain solely responsible for retransmission consent negotiations for NBCU-owned stations with” pay-TV companies besides Comcast, the filing said.
If the FCC approves the deal, it ought to “make those conditions a binding part of its order,” said Bill Hoffman, chairman of the ABC affiliates group. “If not, the ABC, Fox and CBS affiliates will oppose the transaction.” Talks between Comcast and those affiliate representatives were “done in good faith with great respect from where each other was coming from,” added Hoffman, general manager of Cox Media’s WSB Atlanta. He said he agreed with other executives (CD June 14 p5) who have said Comcast’s stated commitment to terrestrial-TV networks ought to help the industry as a whole: “It’s all good for the free over-the-air television model."
The commission must require Comcast to follow the agreement it set out last week, said Wayne
Daugherty, chairman of the CBS affiliate group. “We are saying it needs to be conditional by the commission of any approval,” continued the executive vice president of Raycom Media. “We would have liked to have had some more protections maybe, but we were glad to have gotten what we filed [for]. We're looking for these to be conditions of this approval.” An executive of the Fox affiliate group declined to comment.
Affiliates could have gotten more concessions from Comcast, other broadcast-industry officials said. “This deal is knee-deep in conditions that make lawyers feel good but that do nothing to help people who run businesses,” said a broadcast attorney not involved in the pact. The conditions agreed upon are narrow, the attorney and others said. The agreement “is pretty significant in terms of eliminating a potentially significant area of opposition to the merger that, unlike many of the other objections, was clearly merger-related,” said another lawyer who represents TV stations and wasn’t involved in the accord.
"Comcast has been fairly proactive in dealing with lesser merger concessions upfront,” said analyst Paul Gallant of Washington Research Group. That may be “a way of clearing the decks for the more significant discussions around Internet TV and program access that will crop up later,” he continued. The cable operator shows a recognition “that there are going to be a number of constituencies to satisfy, and because it’s such a well-known group of products and services that there was going to be a lot of attention paid and a lot of political sensitivity,” said antitrust lawyer Chris Kelly of Mayer Brown. “Because of the unique nature of the deal, you've had a lot more proactive work by Comcast and NBC ... to offer assurances up front rather than waiting for the resolution of the regulatory process to start negotiating.”