Citi Media: Comcast’s Roberts: NBCU’s Worst Cable Channel Performs Better Than Our Best

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In a presentation at an industry conference this afternoon, Comcast (NSDQ: CMCSA) chairman and CEO Brian Roberts offered his rationale for the cable operator’s decision to purchase 51 percent of NBC Universal (NYSE: GE) in a deal valued at $30 billion: it’s about getting better production values and scale for its own programming channels. Speaking at the Citi Global Entertainment, Media & Telecommunications Conference in San Francisco, Roberts said that NBC’s worst channel, Oxygen, makes more than Comcast’s best channel, E! Entertainment. That doesn’t mean he thinks Comcast’s channels aren’t doing well — after a decade in the programming business, “Every single asset we have has made money for our shareholders and has grown,” he said. It’s just that NBCU’s channels are so much stronger. By mixing and matching program assets between Comcast’s channels and NBCU’s, coupled with Comcast’s distribution strength, both companies should benefit, he said.

“We’re a small- to medium-sized player,” Roberts said. “But NBCU has some of the strongest cable channels, with USA Network, CNBC, Bravo, and Oxygen all growing and coming in with well north of $2 billion of EBITDA. Our best channel, E!, wouldn’t make the top for or five for the NBC Universal family. Plus, their margins are 50 percent for their cable programming and ours are half that. If you combined the revenues from Comcast’s Style Network, Versus and G4 channels, all of which have reasonably high distribution, it still wouldn’t measure up to what NBCU’s worst channel, Oxygen, makes. Oxygen makes more than those three put together.”

NBC has been able to find some success when it takes a show like Monk and puts it on USA, Roberts noted. In the same vein, NBC Sports’ content could help grow Comcast’s Golf Channel. More from Roberts’ conference webcast is available here.


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