Posted by Ashley McChesney on Mon, Jan 11, 2010 @ 01:12 PM
The U.S. Department of Justice confirmed that it would be the agency to spearhead a review of the $30 billion deal that would give Comcast majority ownership of NBC, Universal Studios, and a host of cable TV franchises. Both the Justice Department and the Federal Trade Commission typically look into mergers that involve potential antitrust issues, but the Department of Justice is taking the lead on this one. Ultimately, the Federal Communications Commission will also need to examine the deal.
Comcast is already the nation's largest cable provider with 23.8 million cable TV customers. The company also owns a few select cable channels, including E! Entertainment and two sports channels--the Golf Channel and Versus. If the NBCU deal is consummated, Comcast will also claim ownership of not just NBC and Universal Studios, but also an array of popular cable networks, including CNBC, MSNBC, Bravo, USA, SyFy, and Oxygen. NBCU also has a minority share in Hulu, while Comcast has Fancast, its own video streaming site.
Not to mention Comcast could also be gaining part of the Universal Studios Theme Park pie with this deal.
Comcast confirmed that it would be filling a public interest statement with the FCC at the end of January.
Read more here.
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Posted by Ashley McChesney on Mon, Oct 26, 2009 @ 10:48 AM
Universal Studios has until an April 1 deadline to refinance $950 million worth of debt, and they are scrambling to make things work and maybe even using some avoidance tactics.
How Stephen Spielberg is saving them
Stephen Spielberg has decided to extend a contractual agreement until 2017, according to legal papers filed on October 20th 2009, though he didn't extend for free as Spielberg will now receive 5.25% instead of the previous 5% annually until Universal decides to buy him out or 2017 (whichever comes first).
Universal signed a deal with the director in 1987 where he would help design elements of the company's theme parks and rides in their two parks in Orlando and one in Japan. In exchange, Spielberg would get 5% of the gross profit from the parks every year, somewhere around $50 million. Although added up to date he is entitled to about $250 million from Orlando alone!
It also appears that he will be guaranteed a percentage of gross revenue from Universal theme parks currently in the works in Singapore, Dubai and two undisclosed locations.
This came just in time as starting in June 2010 Spielberg had the option to forgo his quarterly payments in exchange for a lump sum based on the future value of his deal. That would amount to hundreds of millions of dollars.
The delay in payout will make it easier for Universal to work out reconstructing their current debts. Although they may have been spared a terrible financial mess this year, if things aren't better by 2017 - it is only going to get worse.
The deal amendment also spells out that Spielberg's obligations will transfer to any new owners, which gives the rumor that Comcast is looking to buy up the controlling shares of Universal stock a lot of validation.
Camcast may be taking a piece of the pie
Comcast, the largest cable system operator in the country, is likely to buy a majority stake from General Electric in NBC Universal. CNBC's David Faber reports that GE and Comcast are in talks
"about a deal in which GE would spin off its NBC Universal unit into a new company that would be merged with the content assets of Comcast."
Faber sources his report to "people familiar with the negotiations" and adds that the deal would give Comcast a 51% stake in NBC Universal.
Universal was a second choice though, Comcast had offered $54 billion for Disney in 2004, but were declined because it just wasn't enough money.
NY Times has predicted that the deal will work out like this:
Comcast would make an offer of about $27 billion, creating a new separate enterprise that takes on $9 billion in debt while Comcast would contribute its cable channels, including E Entertainment, the Style Network and the Golf Channel, along with other channels and its local sports networks worth about $6 billion. Comcast would give, by some estimates, $6 billion to Vivendi for its 20 percent share of NBC Universal, and then own 51 percent of the enterprise and use cash flow to gradually buy out G.E.
What it all means
This is all good news for Universal on the money side. Not to mention the fact that investors are feeling better about their Universal stakes after Blackstone group bought out SeaWorld
(Blackstone also has a piece of Universal). Bonds for Universal started trading at 98 cents on the dollar after the deal compared to 30 cents on the dollar last spring.
But the fact remains that the economy is in a slump and they owe billions of dollars in debt. Fine, they delayed it but a payout will be demanded eventually. Disney has taken Marvel, who Universal designed a good half of Islands of Adventure around. It is only a matter of time before Universal will have to come up with a solution to keep those characters or buy them from Disney. Now Spielberg gets an even bigger cut of park revenue. Not to mention the last time a cable company tried to diversify its assets it didn't end well (merger of Time Warner and AOL) Since that merger Time Waner has gone into debt trying to undo the damage the deal brought on.
What do you think the future will hold for Universal Studios?
In good news, the Wizzarding World of Harry Potter will be here at Universal Studios Orlando this summer! That should help earn them some money!
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Posted by Ashley McChesney on Mon, Aug 31, 2009 @ 03:44 PM
Disney buys Marvel for $4 billion in a deal expected to close by the end of the year.
In a statement, Disney Chief Executive Bob Iger said
"adding Marvel to Disney's unique portfolio of brands provides significant opportunities for long-term growth and value creation."
Marvel shareholders would receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own.
Disney will acquire ownership of Marvel including its more than 5,000 Marvel characters, including The Fantastic Four, Spider-Man, the X-Men, The Incredible Hulk and Iron Man, all of which have been turned into highly valuable feature film franchises. Ike Perlmutter, Marvel's CEO, would continue to oversee the Marvel properties, and work directly with Disney executives to integrate them into Disney's businesses.
Marvel fans don't seem very happy about the merger saying that they now expect Marvel story lines to become watered down in order to make them more kid friendly. Although not every company that Disney owns gets a Disney logo stamped on it. Not many people know that Disney owns Miramax film company (who's library includes several Tarentino films), as well as ESPN (80%), and Touchstone Pictures, and that is only naming a few.
It seems stockholders are torn on the new owner. While Marvel stocks are up about 25% today (although they are still trending well under what they did last year), and Disney has dipped down almost 3%. Disney has said the boards of both companies have approved the transaction, but it will require an antitrust review and the approval of Marvel shareholders.
One point of this deal is to help Disney appeal to young men who have flocked to theaters to see Marvel superheroes such as Iron Man in recent years. That contrasts with Disney's recent successes among young women with such fare as "Hannah Montana" and the Jonas Brothers.
The question of the fate of Universal parks has not been answered yet. Universal Studios Islands of Adventure houses an entire set of rides who's themes and namesakes are part of the Marvel library of characters, including Dr. Doom, the Hulk, Storm of the X-men, and Spiderman to name just a few. It seems that Universal will have to pay Disney to use the names and likeness of these characters or Disney will buy out Universal outright, but neither of those options will be acted on in the near future. It seems that Universal has rights to these existing characters for the states to the east of mississippi. This still raises the question if they will have to pay Disney for an advertising done in the states not included in this deal or if Disney will have to pay Universal to use those characters until Universal's contract is up. On a side note, Universal Theme Park stock is traded under GE, and their stocks have gone down almost 1.5%.
**Update**
A statement released from Universal Studios in Orlando, Florida-
"Marvel Super Hero Island at Universal's Islands of Adventure and the Marvel characters are a beloved and important part of the Universal Orlando experience...We believe our agreement with Marvel stands and that the Disney/Marvel deal will have no impact on our guest experience."