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NBC-Vivendi Marriage May Shift Video Deals

10 Oct, 2003 By: Erik Gruenwedel

As expected, General Electric (GE) and Vivendi Universal have confirmed the proposed merger deal between NBC and Vivendi Universal Entertainment (VUE), which observers say could change home video distribution for some NBC product.

Final consummation of the deal is contingent upon federal and state regulatory approval.

The new media company, called NBC Universal, will have assets of about $43 billion, with GE owning 80 percent, and 20 percent owned by VUE shareholders. NBC chairman and CEO Bob Wright will head the new company.

NBC currently distributes its home entertainment properties through a variety of third-party vendors, including Warner Bros., Lions Gate Entertainment and Artisan Home Entertainment.

Some observers expect that many of those deals could be taken over by Universal Studios Home Video (USHV), which has a greater distribution network and could use the product to distribute in the exploding TV DVD market.

A source familiar with the deals cautions that any changes in distribution won't happen for a while due to licensing agreements already in place. “‘Friends' [on DVD] is [distributed by Warner Home Video], and there's nothing [USHV] can do about it,” said the source.

A spokesperson for USHV reiterated that it is premature to determine the exact synergies between the two companies. “This is a great opportunity for USHV to be part of one of the best [media] companies in the world, and we are very optimistic about the future,” she said.

A representative for NBC's home entertainment arm said distribution agreements remain in place and are under review. It's business as usual,” said the spokesperson.

Artisan and Lions Gate representatives declined comment.

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