• by Paul Gough , May 12, 2004

With a $3.6 billion merger under its belt, NBC Universal doesn't see adding distribution anytime soon.

The newly increased media giant won't be going the way of another larger conglomerate, News Corp., which recently purchased satellite provider Direct TV and has a vast empire of both content and distribution. And it won't be following in the footsteps of another big media merger, Time Warner, which combined television, cable TV, magazines, and Internet. NBC Universal Chief Executive Officer Bob Wright told reporters during a news conference Wednesday morning at Rockefeller Center in New York City that the company is perfectly happy with producing content, at least for the time being.

"At this juncture, we're really agnostic in terms of the technical arms of distribution," Wright said. "We're a content company developing, producing, and marketing it." He said that NBC Universal wanted to be "associated with all forms of distribution" in the transition to digital over the next two or three years.

"Our judgment is that we just did not fundamentally want to make a substantial financial investment in one form of distribution or another. Our programming is across all forms of distribution."

GE executives have said that NBC Universal has little interest in distribution, saying instead that its business is in the production of content, whether through NBC and its cable networks (including new ones in USA Network, Trio, and Sci Fi) or its newly acquired Universal Studios of film and television production. NBC's model would make it a big media company along the lines of Viacom, which owns two broadcast networks and a number of high-rated cable channels, but no distribution. In the middle would be a company like Comcast, which is a huge cable and broadband operator, but was recently rebuffed in its attempts to merge with Walt Disney Co. A Comcast-Disney merger, which Disney most decidedly didn't want, would have created a multibillion-dollar powerhouse of distribution and content.

Wright didn't close the door all the way on a deal for distribution. "If some opportunity were to come to us in one area of distribution which looked particularly important or necessary, I'm sure we would pursue it hard," he said.

NBC Universal will be run by Wright, who is not only chairman and chief executive officer of NBC Universal, but also vice chairman and executive officer of NBC Universal's parent company General Electric. He is backed by a team that includes Randy Falco as president of NBC Universal Television; Jeff Zucker, president of NBC Universal Television Group (now responsible for Universal's production); and Ron Meyer--former president and chief operating officer of Vivendi Universal Entertainment--as president and chief operating officer of Universal Studios. Dick Ebersol, chairman of NBC Universal Sports & Olympics, will now be responsible for USA Network's sports programming as well. Jay Ireland remains president of NBC Universal Television Stations, the 29 owned-and-operated NBC and Telemundo affiliates.

Keith Turner, who was in charge of ad sales for NBC Entertainment, has been elevated to president of ad sales for NBC Universal Sales and Marketing, assisted by new NBC Universal Cable Sales Chief Jeff Lucas, a former NBC executive who was running ad sales for USA Network, Sci Fi Channel, and Trio. David Zaslav is now president of NBC Universal Cable.

Wright said that all ad sales operations, with the exception of syndication, will be combined under Turner.

"No one else in the business does that. It differentiates us in the marketplace," he said. "And in this way, we actually provide a much wider array of audience." Wright suggested that NBC and its previous cable networks brought a customer base of between 500 and 600 advertisers to USA Network and Sci Fi, where those channels dealt with maybe 300-400 advertisers.

There will also be some changes to the syndication group, with Frederick Huntsberry becoming chief financial officer responsible for the worldwide distribution team. Barry Wallach will become president of domestic syndication and first-run sales. Belinda Martinez will run international syndication.

Two former Vivendi Universal network chiefs have been promoted to posts in the new company that include their former channels, with Bonnie Hammer becoming president of USA and Sci Fi Networks and Lauren Zalaznick becoming president of Bravo & Trio Networks. They report to Jeff Gaspin, president of NBC Universal Cable Entertainment and Cross-Platform Strategy.

The new company includes NBC, Telemundo, USA Network, Sci Fi Channel, Bravo, Trio, CNBC, and MSNBC, along with the film studio Universal Pictures plus Universal Television, NBC Studios, a stations group, and interest in five theme parks. Vivendi Universal Entertainment received $3.4 billion in cash; GE will own 80 percent of the network; and Vivendi Universal owns 20 percent.