Though it's increasingly unlikely that General Electric Co. will part with the network anytime soon, the moguls have no qualms publicly talking up their interest in it. Viacom President Karmazin boasts that his company, already owner of CBS and UPN, can't wait to make a bid. Diller, now a top exec at Vivendi Universal, appears to have similar feelings. He told Los Angeles Times recently, "We've absolutely got to have distribution outlets, whether we buy them or build them." And the courts may make NBC extremely attractive to Case's AOL Time Warner if they eliminate rules barring a cable operator (AOL Time Warner is the U.S.'s second largest) from owning broadcast stations in the same market (NBC will soon have 14 stations).
As Karmazin dashed out of an event last month, he brushed aside a question about why he continues to declare NBC as Viacom's manifest destiny, a move that could pose antitrust issues, saying, "I don't think they're for sale." Diller and AOL Time Warner Chairman Case know that too, though perhaps they believe everything has its price or they want to appeal to Wall Street. "It's part of the fun of the media game," says Andy Lack, NBC president. "That's part of the playground we're in."
Yet Lack and his boss, NBC Chairman-CEO Bob Wright, don't seem to be doing as much talking about their lust. They're making deals, such as the pending $2.7 billion acquisition of Hispanic-targeted Telemundo and $230 million purchase of San Francisco-area station KNTV. Why make investments if a sale is imminent? "The orientation here is to grow," says Sanford Bernstein analyst Tom Wolzien.
Further, GE Chairman-CEO Jeff Immelt says he's satisfied with NBC's profit margins and growth opportunities. NBC, which includes the local stations, CNBC and stakes in cable nets, is a small part of GE, but a healthy one. Last year, NBC brought in 8.5% of the company's $68 billion in revenues but delivered 10.4% of the $15.4 billion in operating profit. Figures exclude GE Capital.
no `meaningful' talks
GE was believed to be close to selling NBC under former chief Jack Welch back in the early 1990s but never pulled the trigger. "I don't think there have been any genuinely meaningful conversations for several years," Lack says.
Lack also says Immelt continues to be "pretty clear and specific of his desire" for NBC's growth. An elimination of the 35% cap on the national reach of a company's local stations could set NBC on a buying spree.
NBC's future has been deemed murky by outsiders who say it can't compete with media companies that own a broader range of properties. But NBC has its own cross-selling division, NBC Connect, which not only offers ad time across NBC properties but access to something a Viacom or an AOL Time Warner cannot: the GE empire. An ad deal could grow to include joint business ventures, access to consulting services and what NBC calls "a channel to access [GE/NBC's'] customers, partners and employees."
Says Jay Linden, head of NBC Connect: "When we go to people, we can give them media solutions, but nobody else can really give them business-improvement solutions."