Comcast Allowed To Acquire NBC, But Not Control Hulu

Posted Jan 19, 2011

The federal government is allowing Comcast Corporation (NASDAQ:CMCSA) to merge with NBC, but there are limitations. Comcast will not be allowed to sabotage Hulu.com when buying NBC. Comcast’s acquisition of NBC was worth about $30 billion. Media industry executives were interested to see how Comcast would influence Hulu.com. NBC Universal helped create Hulu and owns about 30% of the website.

“Comcast has an incentive to prevent Hulu from becoming an even more attractive avenue for viewing video programming because Hulu would then exert increased competitive pressure on Comcast?s cable business. If the proposed transaction were to be consummated without conditions, [Comcast] would hold seats on Hulu?s board of directors and could exercise their voting and other governance rights to compromise strategic and competitive initiatives Hulu may wish to pursue,” stated the U.S. Justice Department in a court filing.