The DoJ to Keep an Eye on Comcast



Comcast bought GE’s stake of NBCUniversal

It’s been seven years since Comcast (CMCSA) took full ownership of NBCUniversal by buying General Electric’s (GE) 51.0% stake in the business. The deal’s approval came with a set of conditions, including the requirement that Comcast must relinquish management rights in Hulu, the online video business it co-owns alongside Walt Disney (DIS), 21st Century Fox (FOXA)(FOX), and AT&T (T).

The conditions, put in place to safeguard competition in the media market, were to expire in seven years—and that date arrived on September 1. Bloomberg reported on August 28 that the antitrust division of the United States Department of Justice (or DoJ) issued a letter to Comcast. The DoJ noted that it would continue monitoring its practices with respect to television programming and distribution, even after the consent decree that introduced the conditions runs out.

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NBCUniversal generated $8.3 billion in revenues

The NBCUniversal business generated $8.3 billion in revenues for Comcast in the second quarter, accounting for 38.2% of Comcast’s overall revenues. Comcast’s overall revenues rose 2.1% YoY (year-over-year) to $21.7 billion in the second quarter. In the second quarter, Fox’s revenues rose 17.7% YoY, Disney’s revenues rose 7.0% YoY, and AT&T’s revenues fell 2.1% YoY.

Selling assets to resolve antitrust concerns

While Comcast was able to persuade regulators to let it commit to certain antitrust restrictions as a condition for the NBCUniversal acquisition’s approval, regulators appear to be pivoting away from such arrangements.

Instead of requiring a commitment to observe certain restrictions to safeguard competition, the DOJ seems to favor requiring companies seeking to merge to divest assets as a way to resolve antitrust concerns. The DOJ reportedly asked AT&T to sell some assets as a condition to approving its acquisition of Time Warner.


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