Comcast, VUE Exploring Content 'Alliance'

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With second-round bids due Aug. 18, the field of potential suitors for Vivendi Universal Entertainment continued to shrink last week, after Comcast Corp. said it would not make a bid for the U.S entertainment arm of Vivendi Universal S.A.

Comcast issued a statement Aug. 14 stating it would not bid on VUE — confirming reports that it was looking at the assets – but added that it intends to work with Vivendi to "explore an alliance involving both parties' cable channels and Vivendi Universal's worldwide content with the goal of creating new channels and services."

VUE owns cable channels USA Network, Sci Fi Channel, Trio and NewsWorld International, the Universal movie studio and Universal theme parks. Vivendi has had the assets officially on the block since April.

Comcast has interests in several cable networks including E! Entertainment Television, The Golf Channel, Outdoor Life Network and G4.

Vivendi said the alliance would not affect plans to sell VUE.

Metro-Goldwyn-Mayer Inc. pulled back last month over Vivendi's $14-billion asking price. Liberty Media Corp. has seen its desire to own VUE wane after dealing for full control of QVC Inc.

Viacom Inc. was said to be interested in making an offer for the cable channels, but earlier this month chairman Sumner Redstone told reporters in Germany he would not pursue the assets aggressively.

Former Vivendi vice chairman Edgar Bronfman Jr., and General Electric Co.'s NBC television unit remain in the hunt.

Bronfman has assembled a team of private equity investors and Cablevision Systems Corp. Cablevision would contribute programming assets to a partnership, but no cash. Handicappers figure his chances are slim.

NBC is thought by many to be the front-runner, but it proposed a complicated deal that would give Vivendi a minority interest in a combined NBC-VUE. GE's bid would include no cash but would call for a stock offering in two or three years.

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