In all the hubbub over Keith Olbermann’s exit from MSNBC’s Countdown and the chatter over President Obama’s appointment of General Electric’s CEO Jeffrey Immelt as chair of the President’s Economic Recovery Advisory Board (PERAB), a very important point has been overlooked.
The Comcast-GE deal regarding ownership of NBC and its holdings like MSNBC is not a merger or an outright sale.
It’s a joint venture.
This means Comcast and GE are partners in a media company. They are not equal partners since Comcast will hold 51 percent and GE will hold 49 percent of ownership in the new joint venture entity, NBCU (the entity formed from GE-NBC’s acquisition of Universal back in 2003).
Which means that Immelt — who was seated at the state dinner for China’s Premier Hu Jintao, who is now responsible for encouraging economic growth in the U.S. as the chair of PERAB — remains a co-leader of a powerhouse in broadcast, cable and other forms media in this country.
While Comcast claims it didn’t pull the trigger on Olbermann, NBC’s parent company may well have had some input into the termination of Olbermann’s contract.
And while GE may have availed itself during the previous administration of Karl Rove’s encouragement and the Bush administration’s blessings toward corporatist media, the Comcast deal doesn’t terminate GE’s access to similar aid from the Obama administration. Rather, Comcast now gets to play the heavy for an additional two percent of ownership while realizing the same benefits GE received over the last ten years. . . .
And in exchange for giving up majority ownership, GE still receives the benefits of having a pro-business, anti-tax mouthpiece without all the hassle of having to operate media businesses which it still knows little about.
It’s a real bonus; GE can leave that to a partner with a vested interest in media distribution. One can hear the management team at GE rationalizing this deal, telling each other, “Media management is not a core competency for us and it shows; let’s move it down in priority by signing on a majority partner.” At the same time, the pro-business, anti-tax policies which a media outlet like NBC can promote will still benefit GE.
And GE gets capital from selling part of NBC that it can use to offshore American jobs.
Jeepers, it’s almost enough to make one want to buy GE stock; investors who haven’t done their homework probably already have. Pity that GE has been hiding their crappy performance with deals like this for years — first under “Neutron Jack” Welch who “managed earnings” through “accretive” acquisitions, and now under Immelt with “accretive” partial spin-offs.
If all their genius at finessing had really worked, GE’s stock chart wouldn’t look like a has-been.