Zucker mum on Comcast deal

Discusses retrans, affiliates, Leno, ad market

NEW YORK -- "There is not a lot to say," NBC Universal president and CEO Jeff Zucker said here Thursday when asked about the potential sale of a 51% stake in his company to cable giant Comcast Corp.

"I'm (also) incredibly interested" to see what will happen, he said when asked about the situation. "Time will tell."

Current controlling shareholder General Electric and Comcast have agreed on pretty much all key terms of a deal, according to sources. But GE is still in talks with 20% stakeholder Vivendi to buy out the smaller partner, a condition that must be met for a potential Comcast deal.
"The answer is we just don't know," Zucker said. "There's no news to report." GE and Comcast have been hoping to announce a deal before Thanksgiving.

Zucker on Thursday also expressed interest in getting retransmission fees for NBC from distributors - an issue that would see Comcast face diverging interests in different parts of its business, defended the TV affiliate system while saying it needs financial fixes and once again discussed Jay Leno's new talk show.

He made his comments in a chat with CNBC anchor Erin Burnett at the Paley Center Thursday morning. His evasive comments about a potential Comcast deal came after several moments of laughter and silence on his part in reaction to the interviewer's opening question. Burnett had asked whether he was enjoying his last few days reporting to a guy named Jeff, namely GE chairman and CEO Jeff Immelt. Zucker then quipped: "I knew I shouldn't have asked Erin" to do this interview.

"They're looking at the value of content," Zucker said when asked by Burnett about key drivers for any potential acquiror of NBCU. Plus, buyers must like the strength of NBCU's assets, especially the company's fast-growing cable networks, Zucker argued. "Today NBC Universal is a vastly different company" than when NBC was founded, with more than two-thirds of the company today having "nothing to do with either NBC or Universal." He reiterated that 75% of profits come from the core cable networks, which Zucker said is still not widely understood.

Asked about a push by CBS and - more recently - Fox to get retransmission fees from distributors, Zucker said the market seems to be increasingly moving into that direction. "We would expect to play in that, and that would be very advantageous," he said. Asked how long this shift in business models will take to play out, he suggested three to four years. He wasn't asked how he expects Comcast would approach the issue if it took a 51% stake in NBCU as its cable systems business would face higher costs from retrans fees, while the content businesses would benefit.

Questioned whether people will be ready to pay for content in digital formats now that more and more industry giants are pushing for new revenue streams, Zucker argued that "the interest in NBC Universal proves that there is value." He added: "Quality content wins out."
However, he later admitted that "we probably gotta do a better job...at being smarter" in primetime where the NBC network hasn't done "a very good job" in recent years.

Burnett also asked her boss Thursday whether he still believes in spending a lot of money on movies and primetime shows, even though hits are hard to predict. "We certainly believe in spending appropriately," Zucker replied, adding that in hit-driven businesses it is easier to avoid bad moves than pick sure winners.

Burnett also asked Zucker about some of his experiments with new approaches and business models, such as the move to give Jay Leno a daily 10 p.m. talk show.
Zucker said he felt it was "unfortunate" that some of his previous comments on the production cost efficiency of Leno's talk show made it seem like NBCU is more focused on making money than on producing memorable TV. Instead, he argued his team wants to do "whatever it takes to put on the best television."

That also goes for news operations at a time when everyone can be a journalist or citizen reporter or Twitter user. "It's cheap to be first, but expensive to be right," Zucker said. NBCU is investing in "credibility and experience," he added.

Asked about the network affiliate system, Zucker said: "We don't want to throw it out. We think it still works incredibly well," even though the economics need to be fixed. "We shouldn't diminish that" and underestimate its power.

Asked by TiVo CEO Tom Rogers how companies can react to a drop in profitability at their TV stations in recent years, Zucker responded: "We can't look at this as a TV station anymore," suggesting that companies must instead look at the broader local media space as an opportunity. Plus, cost measures have been key.

Overall, he said he is more upbeat about the local business going into 2010 than in a while.
NBCU's local business could see double-digit growth in the fourth quarter for the first time in more than two years, he said.

Asked about the state of the advertising market, Zucker said "the auto market feels a little better." Vancouver Olympics ad sales are "going quite well," and the firm is on track to do well there, he added.

Will the 2014 and 2016 Games be on NBC? "It's something we would like to stay in and continue," but only if it makes financial sense, Zucker said. Industry observers have pointed to the strength that a combination of Comcast and NBCU would have in the sports arena.
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