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Comcast wants a seat at the big table

WHAT DO THESE BIG MASSIVE MONEY DEALS MEAN TO THE AVERAGE GUY OR GAL ON THE ANIMATION STREET?

Universal and Comcast

Is yet another dreaded amalgamation looming on the horizon?

Or, How I curbed my paranoia and learned to love vertical alignment.

Many of us industry watchers saw the stories today about the possible take-over of NBC/Universal by Comcast from their current parent company, General Electric.

I could hardly butter my toast as I read about this in the business section of the LA Times this morning.  I thought, ‘Darn, there they go again.  Where will all this end?’

The answer is never.  Companies will buy companies and merge and reform and do all the stuff that amoebas do as long as they are allowed to do so.  And what does this portend for you and me, not a whole lot unless you own a chunk of stock in one of the merging companies or you’ve just become a redundant executive with the weaker company being folded into a stronger partner.  Even this doesn’t always happen, look at when Time Warner merged/acquired Turner, both animation studios remained separate and unique unto themselves… Someone was smart enough not to try and mix Batman with Johnny Bravo.

If this happens will there be new opportunities for the hoi polloi?  Could be, but don’t bank on it.  Universal Animation is not doing a whole lot at the moment and once Curious George has run its course will be looking no longer at 2-D.  Comcast doesn’t really own cable channels that are in the kids business but they may decide to refocus NBC’s slate for Saturday mornings but hey, I’m reading tealeaves here….

At the end of the day this seems to be (if it happens) a pure money deal.  GE is feeling cash poor at the moment and having just borrowed 3 billion last year from Warren Buffett, does not want to shell out 6 billion to partner Vivendi should they want to be bought out of their 20% ownership.  On the other hand if Vivendi decides to stay the course then the deal crumbles and Comcast can keep looking elsewhere to find a seat at the big table.

Years ago things were simpler.  There were 3 Networks (CBS, ABC, NBC), a number of syndicated channels and groups of syndicated stations and Disney.  The Networks were in the broadcast business as defined by the regulation that allowed them to lease public airways.  They licensed programs from independent producers who retained ownership of those shows and who created their own libraries, which they could then license or sell internationally or domestically once their network deal had expired.  If you licensed a show to NBC you kept all ownership rights, music, ancillary (toys, games, pajamas etc.) and on top of that, you were paid enough by the Network for the license to broadcast your show so that you could pay for the production of the show and even make a profit.

Boy do I long for the old days!

Anyway, the artists and support staff that actually make these shows, earn (relativity) pretty much the same now as back then.  Instead of working for a studio they are now working for a studio owned by a network so I don’t see a lot of value in worrying about these guys gobbling each other up only to get gobbled up by another T-Rex.

Until there is some regulation enacted that prohibits these guys from owning everything, they will – why would they not?  They’re corporations that have one and only one reason to exist, to make money for their stockholders. 

So relax and don’t worry about Corporation A chomping up Corporation B, unless of course you’re a senior VP at Corporation B then you’d better get on the phone and start calling around..

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