Saturday, October 03, 2009

GE Negotiates To Sell Media Unit to Comcast

Color me stunned at the recent news that GE is actually considering divesting itself of its ill-fitting, value-destroying media unit.

However, I've been more stunned by the apparent inability by many pundits and analysts to comprehend why this is such a no-brainer for GE.

For example, on Friday morning, CNBC's David Faber sputtered as he groped for an explanation as to why GE CEO Jeff Immelt is now consenting to that which he has refused for so long- the spin-off of the firm's media properties.

I've written countless posts, found under the "GE" label, about why this conglomerate no longer has a reason to exist. How all 5 or 6 major businesses should be standalones. How shareholders are being ripped off by Immelt and the board, forced to pay a corporate overhead tax for people and functions which add no value to GE's owners, but line the pockets of Immelt and his staff.

Apparently, GE's senior management finally came to view the NBC network's accelerating decline with alarm. Add to that the dismal MSNBC and uneven Universal Studios performances, the minority ownership by Vivendi, and the whole thing probably became a headache best jettisoned while it still has some value.

Like so much else that GE owns, e.g., the credit card and other finance units Immelt tried, belatedly, to unload during last year's credit crisis, the best time to have sold it was years ago.

Now, it's probably going to have to settle for a spin-off of some sort.

Separately, there is the question of just what Comcast thinks it is doing. Brian Roberts is going all in on content as so much entertainment moves to web-based sources. And, again, as I have written in prior posts, owning both media distribution pipes and content has never been a winning hand.

But that's another post.

For now, I'm happy to see that time and fortune have finally eroded GE's objections to the inevitable, and the conglomerate is beginning to be split asunder.

I wonder which GE unit will be teed up for separation next?

No comments: