Prepared Testimony for the Hearing on Competition in the Media and Entertainment Distribution Market, Comcast-NBCU Merger, Judiciary Committee of the House of Representatives

comcastnbcu_hearing

Hearing on: Competition in the Media and Entertainment Distribution Market
Thursday 2/25/2010 – 10:00 a.m.
2141 Rayburn House Office Building
Full Committee
By Direction of the Chairman

Hearing Video:

http://judiciary.edgeboss.net/real/judiciary/full/full022510.smi

Thomas Hazlett: “Markets allow these rival strategies to be tested and winning strategies rewarded,” Hazlett concluded. “I wish Comcast and General Electric shareholders well in their educated guesses.” Comcast-NBC Hearing (Feb. 25, 2010).

“In the proposed transaction being discussed here today, Comcast becomes a 51% owner of Newco, with General Electric receiving 49%. The new venture will combine Comcast’s cable TV program networks with NBCU’s broadcasting network, cable networks and broadcast TV stations, along with Telemundo’s broadcast network and stations. In addition, other assets of NBC, including the Universal Studios theme park, will be contributed to the enterprise. The transaction is large, but not among the largest mergers historically. The joint venture is estimated to be worth about $28 billion, less than the $34 billion Viacom purchase of CBS in 1999, for example, or the $35 billion Sprint purchase of Nextel in 2005. And the 51% Comcast stake, at about $15 billion, is much less than these and many other corporate transactions….. In acquiring additional programming assets, Comcast swims against the tide. The company is wagering that it can make more productive use of GE’s cable and broadcast networks. It does so knowing that its markets are in tumult. Video products are jumping from platform to platform – not just from cable to satellite, but from television to broadband, from linear channels to on-demand networks, from pay to freemium, from TV screens to mobile devices. Some financial analysts have praised Comcast for its bold new enterprise; many have condemned it. Didn’t they learn anything from the failed AOL-Time Warner merger? is a fairly popular reaction. The simple fact is that no one fully understands where today’s tide is headed. Cable operators do not know if they need fear Verizon or Echostar, Google or Apple. Time Warner believes that splitting its cable operations from its program ownership is the best way to prepare for the coming storm. Comcast has come to a much different conclusion. Markets allow these rival strategies to be tested and winning strategies rewarded. I wish Comcast and General Electric shareholders well in their educated guesses.”


Related Articles:

Committee Hearing

Prepared Testimony

Radio Business Report

Congress Told That Comcast/NBC Merger a Big Crapshoot , Ars Technica, Feb. 26, 2010 (But perhaps the most intriguing testimony came from economist Thomas Hazlett, who was circumspect about prospects for the proposed deal. “Some financial analysts have praised Comcast for its bold new enterprise; many have condemned it,” Hazlett, former chief economist for the FCC, told the Committee. “‘Didn’t they learn anything from the failed AOL/Time Warner merger?’ is a fairly popular reaction.”)

Witness List:

Brian L. Roberts
Chairman and CEO
Comcast Corporation
Philadelphia, PA

Jeff Zucker
President and CEO
NBC Universal
New York, NY

Jean M. Prewitt
President and CEO
Independent Film & Television Alliance
Los Angeles, CA

Thomas W. Hazlett
Professor of Law & Economics
George Mason University School of Law
Arlington, VA

Mark Cooper, Ph.D.
Director of Research
Consumer Federation of America
Washington, DC

Larry Cohen
President
Communications Workers of America
Washington, DC

Andrew Jay Schwartzman
President and CEO
Media Access Project
Washington, DC

Marc H. Morial
President and CEO
National Urban League
New York, NY

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