| 'Broadly speaking I would see it as a good thing because we do a lot of business with Time Warner, and a company with a whole arsenal of advertising vehicles can present all kinds of opportunities' |
Would it be such a bad thing? Opinions vary
By Dave Lindorff
General Electric's Jack Welch has come out and said that NBC is definitely not for sale, contrary to wide speculation let loose by News Corp. boss Rupert Murdoch several weeks ago.
Speaking at the Paine Webber media conference yesterday, Welch was quoted as saying, "I've tried to say that in as many was as I can, even when Rupert went off the reservation."
But Welch is slated to retire in another year or so as GE's CEO and he could well change his mind. Or someone could come along with an offer too sweet to refuse.
And so question arises, would it be such a bad thing? Media Life decided to shop the notion around among media directors and Wall Street analysts.
The answer is: depends on who you talk to.
"I'm not going to get caught up in idle speculation," says Alan Banks, executive media director for North America at Saatchi & Saatchi. "But it would be very serious if an NBC sale to a media company were to happen."
Most media people contacted said that their attitude towards an NBC merger with another company would depend on who was the buyer, but a surprising number seemed at ease with the general idea of an NBC acquisition.
"It would certainly create issues at a micro level if NBC were acquired by another media company like Time Warner," says Peter Gardiner, a senior partner and media director at Bozell Worldwide.
"But broadly speaking I would see it as a good thing because we do a lot of business with Time Warner, and a company with a whole arsenal of advertising vehicles can present all kinds of opportunities."
Ellen Oppenheim, senior vice president and media director at Foote Cone & Belding, says, "It could actually be a positive thing for NBC to get acquired by a media company, which would know better the needs of a broadcast network."
On the other hand, she says, "In the case of the Time Warner rumor, there was some concern on my part at least because of the two news operations--NBC and CNN. I felt there might be too much concentration of market power there."
Still, Oppenheim says if NBC is going to be sold, she'd prefer to see it go to a media industry parent.
"If a non-media company bought it, you'd have to wonder whether they'd run it properly. What we want is strong broadcast networks. If a merger strengthens the media, that's good for the advertising industry."
Says Larry Blasius, head of national broadcast at Foote Cone & Belding, "Ten years ago, the kneejerk liberal in me would have been concerned at the idea of an NBC merger, but network TV today isn't what it was a decade ago. It's a pretty competitive market out there today--especially in NBC's prime demo of 18-49, and cable is providing more and more competition all the time, so I don't think a more concentrated industry could necessarily get higher CPMs out of us."
Of the recently rumored Timer Warner purchase of NBC, Blasius says, "It might actually have created a one-stop shopping kind of thing. There's very little overlap these days between The WB and NBC."
Okay, so the folks in medialand are cool about NBC getting hitched to some media company, but is it going to happen?
Not likely, say some key Wall Street analysts.
"The Time Warner thing was highly unlikely," says Prudential Securities television industry analyst James Marsh.
"It's not that the price was too high, but Time Warner can't own broadcast TV stations where it already owns cable stations, and without the $1.3-1.4 billion in revenue and $600 million in cash flow generated by NBC's O&O's, the deal wasn't very attractive."
Another leading industry analyst at a major investment house who follows GE says, "I don't think GE's at all interested in selling NBC. I think they see NBC as being really important to them. It's their window into ecommerce and the internet."
"I think all the rumors about GE selling NBC are the result of a prejudice among media analysts against GE. They don't think a dull business like GE should be owning an ego-driven enterprise like a broadcast network. But hello! GE runs NBC like a business. They cut costs, make it adhere to the principles required by other divisions at GE, and they don't get caught up in crazy ideas like vertical integration and the owning of production facilities."
"I don't think Jack Welch wants to rock the boat at GE before he retires," says Prudential Securities analyst Kathy Styponius.
"On the other hand, if the right suitor came along I'm sure he'd sell NBC."
-Dave Lindorff is a
staff writer for Media Life.