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Comcast Mystery: $100M 25-Year Content Deal

5/02/2008 12:51 AM

Another interesting tidbit from Comcast’s Q1 earnings Thursday: The operator disclosed that it shelled out $100 million in cash for a 25-year programming rights deal.

Comcast CFO Michael Angelakis brought up the one-time payment to explain that free cash flow would have been even higher for the quarter without it. Even with the $100 million hit, free cash flow rose 59%, to $702 million, compared with $442 million in Q1 2007 (see Comcast Revenue Climbs 14%, As Basic Video Subs Drop).

The $100 million payment, the way Comcast is accounting for it, affected free cash flow but had a "de minimis impact" on operating cash flow, Angelakis said. That’s because the rights deal is amortized over 25 years. 

"So it is a bit of a one-time hit and I just thought it was important that folks recognized that free cash flow, though it performed well on a little bit of an apples-to-apples basis, performed even a little bit better," Angelakis told analysts.

Comcast remains on track to grow free cash flow by at least 20% in 2008 as the company has previously indicated, Angelakis said.

Now we’re left wondering: Who got that $100 million wire transfer? One wild guess — perhaps Comcast has taken a stake in the Viacom/MGM/Lionsgate fourth-wheel premium network. 

As Multichannel News’ Linda Moss reported in this week’s issue (see "Showdown With Showtime"), Comcast would be an obvious partner and its absence at the venture’s unveiling "had several network executives scratching their heads last week."

After all, Comcast already owns 20% of MGM. Comcast and Lionsgate, along with Sony Pictures Entertainment, are partners in Fearnet, the VOD/broadband horror-movie play.

Any other theories about the $100 million deal? Post ‘em below.

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