Thursday, December 10, 2009

Ignorant Bargain Hunters

Comcast just announced some egomaniacal deal with NBC:

Comcast, the largest U.S. cable company, is buying a controlling stake in the entertainment giant NBC Universal for $13 billion, the companies announced Thursday.

The long-negotiated deal drew immediate criticism from consumer rights groups who say that combining Comcast’s control over cable and internet distribution with NBCU’s television stations and movie studio will give the combined company the motivation to choke free video services and gouge cable customers.

"In combining a major television network, a movie studio, a cable programmer and the largest internet service provider/cable operator, this new joint venture must be ready to take extraordinary steps to alleviate concerns about potential anti-competitive behavior if it expects the deal to be approved," said Gigi Sohn, the president of the open internet advocacy group Public Knowledge.

Comcast is paying GE about $6.5 billion in cash and $7.25 billion in programming for a 51 percent stake. GE remains in control of the rest of the company, valued at $30 billion in the complicated deal.

I could care less about the anti-competitive nature of this deal. It is surely doomed to fail a la AOL/Time Warner.

Insteady, I want to highlight the Moron responsible - Brian Roberts.

Admittedly, I know very little about him or the technical aspects of the TV and cable businesses, but quotes like these are sufficiently illuminative:

"There is more of an upside than downside in NBC," Roberts said yesterday on a conference call with investors.

Comcast is buying "at or near the bottom of this economic cycle," and NBC Universal is likely to recover with the economy, Roberts said.

Say what?

Shades of Bank of America's Ken Lewis if you ask me.

Remember Kenny said that Q4 of 2007(!!!!) was going to be the worst quarter his bank ever faced!

And Ken also went macroeconomic bottom-picking with Countrywide...

Remember we had a *booming* economy from 2000-2009, and yet Comcast's stock went nowhere. So even if the wide-eyed, empty-headed Roberts gets his *bottom of the economic cycle* does that guarantee NBC Universal will benefit?

And, more importantly, how are they going to do in a toilet-spiraling economy? I've got to think that strapped consumers are going to start canceling or reducing the consumption of their cable TV.

Content is soooooo dead.

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