NBC Universal (General Electric)

Considered the quiet giant in the media business, General Electric made news in a big way in May of 2004 with the completion of the blockbuster purchase of Vivendi Universal Entertainment. The resulting combination added badly needed film and television production capability to NBC, something competing media giants have had for years.

The $14 billion deal resulted in the creation of a new company, NBC Universal. The venture is 80 percent owned by GE and run by longtime media industry heavyweight Bob Wright, who is chairman and CEO of the new company. Wright also maintains his position as vice chairman of GE’s board of directors.

Vivendi Universal has 16,000 employees and is expecting 2005 revenues of $15 billion. But the company is still just a small cog in the huge corporate machine that is GE. Consider that GE’s roughly $134 billion in revenue is more than Time Warner Inc., Walt Disney Co. and Viacom Inc. combined.

The network generated only 5.1 percent of the company’s total 2003 revenues, according to its most recent 10K filing. But make no mistake; NBC has always been a major media player, with 14 owned and operated television stations plus more than 230 affiliates. NBC also owns 15 stations through its purchase of the Spanish language Telemundo network.

GE, through the NBC network, owns Telemundo, the Spanish language broadcasting network and partially owns cable news channel MSNBC, business network CNBC and cable channels A&E Television Networks, American Movie Classics and Bravo.

General Electric, created in part by Thomas Alva Edison, is a true broadcast pioneer, having founded NBC in 1926 in the early days of radio with RCA and Westinghouse. GE profited from producing shows and selling the radios people used to listen to them. RCA took over NBC in 1932, but GE got back in the business when it bought RCA in 1986. Today, GE’s operating interests include aircraft engines, broadcasting, consumer finance, consumer products, insurance and power systems.

In addition to NBC’s brand holdings, GE also has a non-voting interest in Paxson Communications Inc. (Ironically, GE has all but given up on radio, having sold most of its stations in the late 1980s.) It also has a strategic alliance with Dow Jones, publisher of the Wall Street Journal.

Wright, the new chief at NBC Universal, has considerable clout in Washington as well as on Wall Street. Wright was actively involved in efforts last year to get the FCC to overturn limits on the number of television stations that can be owned by a single company. While the FCC’s decision to loosen limits was rejected by a federal court, Wright and other network honchos enjoyed a partial victory. The White House signed a bill raising the national audience cap for television station owners to 39 percent from 35 percent.

—John Dunbar, Robert Morlino

August 20, 2004

Sources: General Electric Form 10-K, NBC Web site, Broadcasting & Cable, New York Post.