Immelt: GE Not Done With Cable, NBCU

Chairman Tells CNBC TV Properties Will Remain Intact

By Mike Farrell -- Multichannel News, 8/23/2008 6:28:00 AM

General Electric chairman Jeffrey Immelt tried to quash the growing speculation that the conglomerate would shed its NBC Universal unit last week, hinting to cable channel CNBC that the group of cable, broadcast and movie properties would stay intact.

In an interview Aug. 18, Immelt said that NBC, which has enjoyed a huge ratings boost as a result of the Beijing Olympic Games, is a critical part of NBC Universal and the GE empire, “but we’ve got to be doing a multitude of other things at the same time.”

“With the age we live in — more fragmentation, ubiquitous distribution — those two things are a powerful combo and I think that’s what [NBCU president and CEO] Jeff [Zucker] and his team are building,” Immelt continued. He characterized the speculation around a possible sale as “kooky silliness.”

NBC’s Olympics broadcasts have averaged more than 30 million viewers nightly, fueled by U.S. swimmer Michael Phelps’s successful quest for eight gold medals. While some observers anticipated a huge ratings drop-off once Phelps achieved that goal Aug. 16, the remaining broadcasts have held their own.

Some analysts and investors have called for the sale or split-off of NBC, particularly as the broadcast network has struggled in the ratings war. The Peacock Network has finished the year in last place among the Big Four broadcasters for three years running.

The speculation of a GE-NBC Universal split heated up earlier this year, when the conglomerate said it was exploring a spinoff of its Consumer and Industrial unit, which includes its appliances and lighting businesses. GE sold its plastics division last year to Saudi Basic Industries for $11.6 billion.

But in the interview with CNBC — a network that GE also owns — Immelt denied ever considering a sale of NBC.

“It’s not like we’ve got this fire sale going on around the company,” Immelt told CNBC. “This is a triple-A-rated company that is outperforming our relevant competitors in the industries we’re in and I think the Olympics is a good proof statement of that — in a tough economy, we’ve delivered for our advertisers, we’ve delivered for our investors. These are the kinds of things GE can do.”

NBC Universal also has been an aggressive buyer in the cable marketplace — it agreed last month to purchase The Weather Channel Cos. with private-equity partners Bain Capital and The Blackstone Group for about $3.5 billion. That deal is expected to close by the end of the year. And last year NBCU purchased women’s-oriented cable programmer Oxygen Media for about $875 million.

“We’re not done doing cable deals,” Immelt told CNBC.