Critics slam NBC-Comcast deal despite dismal track record of media mergers

The Federal Communications Commission (FCC), Department of Justice (DOJ), and five state attorneys general have given the green light for media provider Comcast to buy a 51 percent share of NBC Universal. The nod came with plenty of regulatory requirements aimed at safeguarding Comcast’s competitors and monitoring the burgeoning online video market.

Those regulations were based on concerns that a merger between Comcast and NBC will stifle free speech and competition. The only problem is that there is little evidence supporting those fears. History shows media mergers of this scale, or media consolidation, have a dismal track record of success.

When the media companies Time Warner and AOL announced their merger in early 2000, the deal was met with similar doomsday cries. Media reform advocates watched in horror as two of the largest media companies joined forces.

What happened next shocked almost everyone. Two years later, the corporation, AOL-Time Warner was hemorrhaging money, reporting a $54 billion loss. A year later, those losses grew to $99 billion and the deal unraveled, with Time Warner shedding AOL completely.

Even Rupert Murdoch could not pull off a successful takeover of DirectTV by his News Corp. When Murdoch announced he was pursuing the satellite television company, activists responded by warning of skyrocketing prices for consumers and unprecedented control over national and local media. But the deal turned out to be not as profitable as Murdoch hoped, and News Corp. divested itself of DirectTV after three short years.

And in 2007, when Sirius was looking to merge with XM Radio, a group of six coalitions, including Free Press and The Consumer Federation of America, said in a joint statement to Congress that the merger “is antithetical to the competition laws, perhaps the worst offense against the basic principle that competition is the consumer’s best friend.”

The deal took more than 500 days for the FCC to approve. Shortly after, however, the company’s stock fell to below 10 cents a share and in early 2009, it flirted with bankruptcy.

In light of these previous unsuccessful media merges, one wonders why critics are once again sounding the alarm over the Comcast-NBC deal.

“This deal will give Comcast unprecedented control over both media content and the physical network that delivers it,” Josh Silver, president and CEO of Free Press, said in a statement responding to the FCC vote approving Comcast’s deal with NBC. “While the FCC has adopted conditions, they are insufficient short-term or voluntary fixes that will fail to prevent permanent harm to competition, consumer choice and the future of the Internet.”

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    • Bob Armstrong

      PMSnbc !

      Love it .

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  • J Baustian

    Quote: “Perhaps the worst thing about today’s announcement is that it sends a message to other phone and cable companies that they, too, can buy up content providers,” said Schwartzman.

    The lesson, soon to be learned by Comcast, is that if you’re going to buy a content provider, then you should not pay very much for one worth as little as NBC-Universal.

    The NBC network has terrible ratings. MSNBC sucks. CNBC is okay but has surprisingly few viewers. They’ve destroyed Bravo, the History Channel, A&E, and Biography. USA Network is pretty good, but why buy all of NBCU just to get that one. I don’t have an opinion on Telemundo as i never watch it.

    • J Baustian

      Of course, NBCU has been so terrible, that there are a great many possibilities for improvement.

  • I_Walk_Alone

    Comcast-NBC Universal seems to be nothing but a pro Obama “liberal/left-wing” Propaganda machine of the “Main-Stream Media”.

    They “Comcast” will try to limit those over the top, blow-hard, left-wing, hate spewing a**holes on “MSNBC: The Place for Propaganda”; Ed Shultz, Chris Mattews, Keith Olbermann, Rachel Maddow, etc.

  • lev

    Yes it could be doomed!

    In the year 2000 FCC unconstitutionally removed all the PBS stations from the access law. The ‘as-applied’ challenge to FCC jurisdiction over the First Amendment right to access is nearly ready for the federal court. In the 2008 election, the independent candidate for president applied to all of the networks for access. They all ignored his requests except for NBC which sent the unknown candidate a letter mocking his political campaign and his rights.

    The access law is very clear: For the willful and repeated failure to allow access, the Commission may REVOKE a network’s license. The court is empowered to order the Commission to do just that. The ORDER TO SHOW CAUSE is part of the petition.

    The bottom line: Comcast could be getting an empty shell with the license of NBC and all of their licenses up for public auction, netting our government billions. Are we afraid of speech? The petition,nearly finished, is beyond 300 pages without a wasted or repetitious paragraph.It is the other side of the Citizens United coin.

    A smart move on Comcast part is to start dragging their feet because they will have the opportunity to bid on the whole ball of wax at public auction.

    Michael Stephen Levinson is the black listed poet behind the petition. He brings to the political table a Vehicle for World Peace, that in the form of a Television Scripture he plans to perform, from dusk until dawn, like old blind Homer, with every line a delicate sensible rhyme, for all the worlds’ peoples to participate in together all at once, beginning with Adman and Even in the Gar Den ov Edum.

    NBC and the others willfully ignore the Supreme Court precepts that it is the right of the viewers and listeners, not the right of the broadcasters that is paramount. We shall see what happens with michaelslevinson, the “jacklegs jumping up.”

    Are we afraid to allow the poet author of prophetic works to tell his vision? A note to the readers: run the words “jacklegs jumping up” in The New York Slimes archive. Knock your socks off when you see what you get.

    michael s

  • VideoSavant

    I think you are presenting the wrong argument when it comes to the Sirius/XM merger — the fact that this merger took 500 days to get a government seal of approval is one of the key reasons that the combined companies ended up facing the prospect of bankruptcy.

    This is a classic example of how the wisdom of the smartest regulators is no match for the dynamics of a free and market, particularly in emerging new marketplaces such as satellite radio.

    While XM and Sirius management sat around with the government’s thumbs keeping uncomfortable company with them for nearly 2 years, the market and prospects for mobile radio changed fundamentally, with the creation of streaming services like Pandora, Radio Time/TuneIn, Slacker Radio, etc. When the sat radio merger was announced, the iPhone had only existed a month, but it opened the door to a completely new distribution channel for mobile media that fundamentally changed that market.

    Yes, you could argue that the Sirius/XM merger was a bad management decision and even that the executives should have seen how the market was changing with the arrival of the iPhone. It’s quite possible that absent the government waiting game, that XM/Sirius still would have been on the wrong track, but the fact that they had to endure having their hands tied by government red tape was at least as important to the companies’ ultimate fate.

    More to the point, the way the market changed ultimately undercut any legitimate or rational concerns about XM/Sirius acting as a monopoly entity.

    The government had absolutely no business telling XM and Sirius whether or not they could merge.

  • independentvoter

    See just because one lives in what they consider a low income area does NOT mean the people who live there actually are poor.. difference is when one lives within ones means they have MORE disposable cash than those that make more and spend more.. Therefore one can live in a low income area and be better off than those who make more and live in better area’s.. which proves the point NEVER flaunt what you have..
    I do hope they that NBC becomes unbiased.. I use to listen to Maddow (on Air America) the LAST thing she wanted was a fairness doctrine she use to RANT about it all the time.. how it wasn’t fair since they HAD to bring the other sides point of view..the ones at MSNBC must be shaking..

  • dj

    Since NBC and MSNBC have liberal newscasters and pundits, doesn’t COMCAST now have an excuse, because of the contract caveat, of balancing these networks with conservative newscasters and pundits?

    I did a little research Monday on the Roberts family (owners of Comcast)politics and they donate to conservatives.

    Jeff Immelt had method to his madness by staffing NBC/MSNBC with liberals since he had been close to Obama and GE would have stood to make billions if the Cap and Trade had passed. I was a little surprised a couple of weeks ago by Immelt’s negative remarks on the Obama Administration. I guess all is not well in the Land of Oz.

    I love their cable sports coverage and maybe this deal will work to the conservatives’ advantage.

    • oeno

      You are thinking that the family even cares about MSNBC…that’s far off the radar.

      The original programming that NBC hasn’t been able to do (think anything you seen on Bravo or USA)comes into the stable. Now ideas that ended up on basic cable (I still laugh at ABC passing over “Monk”)can wend their way to a an actual network.

      Even the highest (I think it’s still Bill O’Reilly)rated White Noise Network folks only get 5 million viewers on a good day. MSNBC isn’t even an afterthought (though it will expand the viewers, because it will be available in a lot more homes at a lower channel number, via their forcing people to pay for digital).

  • emem

    So the administration that whines so much about fat children is forcing a buisness to provide more “children’s channels” because watching cartoons is valuable and forcing the rest of us to subsidize low income areas? $10 a month – REALLY?

    Does this mean that a portion of everyone’s comcast bill will be considered a tax deductible charitable donation?

    If I was a Comcast shareholder, I would want the MAC clause invoked because the regulatory terms most likely will cause devaluation and broad corporate
    losses ie jobs, service performance, etc.

    • thephranc

      Don’t forget about all the new minority stations that were bribery payouts along with the cash so the FCC and DOJ ( both headed by racists scum) would allow this merger to happen.

  • spike1120

    The screams will be heard from every lib in the country. They are worried about the far left slant of lean forward (MSNBC) and the departing Zucker far-left baggage toter.

    Would that be a pity if the reporting at the NBC family of networks suddenly became even-handed and unbiased?

    Where do you think the little demigods -olbermann, maddow, ratigan, ed?, matthews – would be able to spout? Did you just answer NPR, think again when the $445 million subsidy is removed.

    • GeniousIQ

      Way to miss the entire point of what’s going on and do nothing but spew out idiotic and vapid talking points.