NEW YORK – NBC clinched its big media prize Wednesday, completing a merger with the Universal television and entertainment businesses to create a major media conglomerate.
NBC Universal will rival Time Warner Inc. and Viacom Inc. in industry clout by combining a top-rated TV network backed up by a major film and TV studio.
The new management lineup is heavy with NBC talent, starting at the top with NBC chief Bob Wright, who will be chairman and CEO of the new company. NBC entertainment leader Jeff Zucker will manage all of NBC Universal’s programming, while Randy Falco, head of the NBC network, will oversee sales and operations.
The only executive from the Universal side to keep a senior role at the company is Ron Meyer, the head of Universal Studios, who will remain head of the Hollywood studio and its associated theme parks.
Appearing at a news conference in New York, top executives from the new company downplayed questions about cultural differences between NBC and Universal and said they expected a smooth merger. The AOL Time Warner debacle wasn’t mentioned by name, but its well-publicized problems were clearly on everyone’s mind.
“It wasn’t done haphazardly,” Meyer said of the months-long planning process of NBC and Universal. “I think we can do it differently and better than it’s ever been done before.”
In fact, Universal itself had been part of another ambitious media merger that went bad. Vivendi, a French water utility and telecommunications conglomerate, bought Universal as part of a deal intended to transform the company into a global media player.
But the engineer of that expansion, Jean-Marie Messier, was ousted after his acquisition nearly bankrupted the company. The deal with NBC was a major part of Vivendi’s plans to sell assets and reduce its debt.
Vivendi will still own 20 percent of the combined company, with NBC parent company General Electric Co. owning the rest. GE is also assuming $1.7 billion in debt from Vivendi and paying Vivendi $3.4 billion in cash as part of the deal.
The deal brings together television’s top-rated network among the 18-49 age group, which advertisers try hardest to reach; a major movie studio; a television production studio; a handful of cable TV channels including USA, Sci-Fi, CNBC and Bravo; and a group of 29 television stations.
Several of the Universal businesses are familiar to NBC, including cable networks, television production and syndication. Movies are a new area for NBC, but Wright said in an interview that the movie development process “is not terribly different” than that of TV entertainment shows.
“The benefit we get out of the GE way of doing business is to try to get things to operate smoothly together – big things,” Wright said. “We’re used to that.”
Wright said he expected the company to see about $500 million in benefits from the merger, including cost savings and revenue growth. He said he expected the job cuts to be limited to 500, or less than 3 percent of the company’s workforce, over the next several years.
Falco, who will oversee ad sales and operations for NBC and all its cable networks, said he expected to see even more efforts in the future to promote NBC shows across its various media properties.
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