Mergers & Acquisitions and Comcast and TV Stations and WTHR and TV and Communications and Media & Marketing

Comcast's pledge to NBC stations keeps Olympics, NFL off cable

June 22, 2010

Television station owners affiliated with NBC agreed to support Comcast Corp.’s purchase of NBC Universal after the company pledged it won’t shift events such as the Olympics and U.S. football to cable, an executive said.

The agreement keeps NBC’s Sunday night National Football League games and the 2012 Olympics on free over-the-air television, Michael Fiorile, past chairman of the NBC Television Affiliates Board, which represents more than 200 NBC stations not owned by the network, said Monday in an interview.

“We support the merger with these conditions, which they tell us they won’t oppose,” said Fiorile, president of closely held Dispatch Printing Co., which owns NBC affiliate WTHR-TV in Indianapolis. Comcast endorses the affiliates’ position, said Washington-based spokeswoman Sena Fitzmaurice.

The $28 billion transaction would give Philadelphia-based Comcast, the largest U.S. cable company, control of NBC’s network, owned-and-operated TV stations, cable channels and a movie studio. As affiliates backed the takeover, the Communications Workers of America labor union and Bloomberg LP, parent of Bloomberg News, joined opponents of the deal as proposed.

“A company of this size will be able to exert an unhealthy degree of influence over the media landscape,” according to a letter the CWA, Bloomberg and groups including Common Cause and the Writers’ Guild West sent Monday to the Federal Communications Commission and Justice Department. The deadline to file comments at the FCC was Monday. The agency hasn’t set a date for a decision.

The merger may cause “significant anti-competitive and consumer harms,” Matthew Polka, chief executive officer of the American Cable Association, representing small cable companies, said on a conference call.

Comcast-NBC would be able to increase programming fees by 20 percent “and possibly much more” in 60 large and mid-sized markets, the Pittsburgh-based cable association said in an e-mailed statement. The association wants conditions before regulators approve the merger, Polka said.

The FCC can impose conditions on Comcast relating to the combined companies in return for approving a deal.

Comcast will “comprehensively address” concerns raised in Monday’s filings with the FCC by the July 21 deadline to respond, said Executive Vice President David Cohen on a company blog. More than 140 federal, state and local officials have written to support the merger, including the governors of Pennsylvania, New York and California, Cohen said.

The deal is “pro-competitive, pro-consumer, and in the public interest,” Cohen said. The combination would encourage investment and bring diverse programming, the company told lawmakers during hearings in February.

In talks with the NBC stations, Comcast also agreed to separate the negotiations when stations renew affiliation agreements with the network from the talks over the price Comcast pays to carry an affiliate’s signal on its cable systems, Fiorile said.

“We’re really kind of pleased with them coming into NBC,” said Fiorile of the affiliates group. “They’re in the sports business, they’re in the entertainment business, and with these safeguards they’re not going to contest, we feel pretty good about the deal.”

NBC is set to broadcast Sunday night NFL games through 2013. It has the rights to the summer Olympic games in London in 2012, and has said it plans to bid for the 2014 and 2016 games. The events bring more viewers for the network and its affiliates, who control some of the advertising time and revenue.

Comcast pledged to protect broadcast television when the deal was announced Dec. 3, and “keeping certain marquee events on over-the-air is part of that commitment,” said Fitzmaurice, the Comcast spokeswoman.

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