A deal to merge General Electric's NBC Universal into a new joint venture with Comcast's cable networks faces significant financial and legal issues. As a result, the talks are still at an
early stage. Insiders give the transaction "50-50" odds of coming together.
In the deal, Comcast would contribute cash and its cable networks to NBC Universal for a 51% stake in the
expanded company. NBC Universal would borrow money that would be turned over to GE, along with the cash contribution. GE would use that cash to buy out a Vivendi's 20% stake in NBC Universal and
end up with a 49% stake.
A big problem is figuring out much Comcast's cable channels are worth, and establishing a value for NBC Universal that Vivendi will agree to. Antitrust regulators
may also look at how the deal would affect local advertising rates, particularly in Philadelphia, Washington, D.C. and other markets where Comcast is a local cable operator and NBC owns its local
affiliate. NBC owns 26 local NBC and Telemundo stations.
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