[opendtv] Analyst: NBC Network Is Worth 'Negative $600 Million'
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 27 Sep 2010 16:02:52 -0400
http://www.hollywoodreporter.com/hr/content_display/television/news/e3id8b4313a40c3bc11ca6c41e08ec56453
Analyst: NBC Network Is Worth 'Negative $600 Million'
USA's estimated value: $11.7 billion.
By Georg Szalai
Sept 27, 2010, 11:36 AM ET
NEW YORK -- USA Network is the most valuable part of NBC Universal at
$11.7 billion, but the NBC network is worth a negative $600 million,
according to Wunderlich Securities analyst Matthew Harrigan. He also
puts the value of the Universal studio arm at about $4 billion.
Harrigan listed the valuation estimates in a research note on Monday
following Friday's news that Jeff Zucker will leave his role as CEO
of NBC Universal to Comcast COO Steve Burke after the cable giant
acquires the entertainment firm.
"Burke appears likely to focus on revitalizing the NBC network and
addressing digital media and subscription model initiatives,"
Harrigan wrote. "In the interim, Universal head Ron Meyer is apt to
remain in position even with uneven market share and financial
performance at the Studio," which he doesn't expect to be a near-term
priority for Burke. "The NBC Network is simply more important
perceptually and from a pop culture vantage point."
According to the analyst, the NBC Universal cable networks make up
78% of NBC Universal's valuation. Thanks to the
stronger-than-anticipated recovery in the advertising market, the
total company is likely worth slightly more than $32.5 billion, he
said. In the Comcast deal, NBC Universal was value at $30 billion.
The negative $600 million value for NBC comes "as it remains a
capital call for programming development as long as it remains mired
in the #4 network position," Harrigan said.
Thanks to the NBC and Telemundo stations that NBC Universal owns and
NBC Universal TV, the value of the firm's overall broadcast division
stands at $3.5 billion though, according to the analyst.
The studio's $4 billion and theme park unit's $1.4 billion combine
into a total $5.4 billion studio and parks business, according to his
estimates.
But both are dwarfed by Harrigan's $32.7 billion valuation for the
NBC Universal cable networks, including nearly $6.3 billion for Syfy,
$3.9 billion for CNBC, $2.8 billion for MSNBC and $2.6 billion for
Bravo.
Harrigan's total adds up to $41.6 billion, from which he subtracts
nearly $9.1 billion in corporate and capital expenditures to arrive
at a valuation of a bit more than $32.5 billion.
Adding in the $6 billion value of Comcast's cable networks, the
combined NBC Universal-Comcast joint venture will be worth $38.6
billion before $9.1 billion of debt, or $29.5 billion when accounting
for that debt, Harrigan said. That would put the value of Comcast's
51% stake at around $15 billion.
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