In Secret Meetings, Comcast Wooed GE and Won NBC

The secret meeting was set for an early July afternoon in a condominium along the ninth hole of a golf course in Sun Valley, Idaho. Jeffrey R. Immelt, General Electric’s chief executive, arrived first, taking care to avoid being spotted by his own employee, Jeff Zucker, the chief executive of NBC Universal, who was mingling with other executives nearby.

Ralph J. Roberts, the 89-year-old co-founder of the cable giant Comcast,

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[CMCSA  Loading...      ()   ] and its chief operating officer, Steve Burke, arrived 15 minutes later.

The gathering, which had been brokered by James B. Lee Jr., a vice chairman of JPMorgan Chase, was set up for one purpose: Mr. Immelt, who had resisted the urge to sell NBC for years, was finally ready to sell. For months, he had been in discussions with Mr. Roberts’s son, Brian, Comcast’s chief executive. But now, at the investment bank Allen & Company’s annual media conference — known for big deal-making — he wanted to hear it from the mouth of the company’s patriarch.

AP

“Do you want to do this?” Mr. Immelt, dressed informally in a polo shirt, asked Mr. Roberts, who was wearing his trademark bow tie, and Mr. Burke, who was Mr. Immelt’s classmate at Harvard Business School.

“Yes,” Mr. Burke said.

Mr. Roberts, who founded Comcast in Tupelo, Miss., in 1963, said: “I’ve done a lot of deals in my life. Every deal has its time. This is the right time.”

On Thursday, G.E.

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[GE  Loading...      ()   ] is planning to finally announce what had leaked more than a month ago: it is selling a controlling stake in NBC Universal to Comcast, a deal that will once again reshape the media landscape.

The transaction, the largest during Mr. Immelt’s tenure as chief executive, will also reshape G.E., refocusing it into an industrial and financial conglomerate without the flash — and financial instability — of a television and film business. And in the process, he has been undoing much of the legacy of his predecessor, John F. Welch Jr.

The deal was a long time in the making and was filled with meetings at the Four Seasons hotel in Philadelphia, in New York City apartments and on helicopter rides. It also featured code names: G.E. was Green, NBC was Navy, Vivendi was Violet and Comcast was Crimson (because of the Harvard link).

More than a half-dozen executives involved in those discussions, speaking on the condition of anonymity because the deal had yet to be formally announced and because the negotiations were considered confidential, helped reconstruct a nearly yearlong dance between G.E. and Comcast.

Mr. Roberts had long wanted to control not just the pipes into people’s homes, but the television shows and movies that flow over them. But since 2004, when he sought and failed to buy the Walt Disney Company, the media industry’s economics had cratered. Broadcast television was suffering through ratings declines, and a falloff in DVD sales had dented profits in Hollywood. But cable channels, of which NBC Universal has many, were flourishing.

The prospect of a deal with G.E. began in earnest in the late afternoon on March 3 on the 48th floor of JPMorgan, when Mr. Roberts and Mr. Burke came to meet with that firm’s chief executive, Jamie Dimon, at the behest of Mr. Lee.

The meeting began with a general discussion of Comcast’s finances, but Mr. Roberts said the company did not need a bank to raise money. Instead, he changed direction by saying he had been pursuing Mr. Immelt about NBC but felt like he was getting nowhere. He felt that G.E. was in a vulnerable position and highlighted the fact that when NBC acquired the Weather Channel earlier in the year, it partnered with private equity instead of buying the network on its own. It was a sign, Mr. Roberts believed, that Mr. Immelt might not be fully committed to the television business. Mr. Lee said he was having breakfast the next morning with Mr. Immelt and agreed to mention Comcast’s interest.