Taking NBC Universal public has been floated around for a long time, and it is something minority owner Vivendi SA's CEO Jean-Bernanrd Levy said Tuesday he would certainly support.
"It was part of the thinking we had back in 2003 when we created NBC Universal that maybe when Vivendi would exit, one way ... would be through a flotation on the stock market and maybe that is what will happen," he told Reuters. But the question is whether or not the market would support an NBC Universal IPO.
In the current market, media stocks such as CBS Corp. (NYSE:CBS) and News Corp. (NYSE:NWS) have made a slow resurgence, but the main catalysts in these businesses, advertising revenue, remain weak.
It doesn't help that NBC's ratings have dropped from last season and the network is currently tied in third place with Fox among the top six networks. Meanwhile, television network's audiences have been dropping as other platforms for watching television have emerged via the Internet through sources such as Hulu.com and YouTube.com, video-on-demand services from cable companies and Netflix Inc. (NASDAQ:NFLIX), as well as DVD rental companies like Blockbuster Inc. (NYSE:BBI).
If an IPO does happen in the current media environment of sluggish ad revenue, expect the demand to be tepid at best. The only ones likely to profit from a public offering of NBCU are likely to be the banks through their IPO fees. - Gerald Magpily
Continue reading below
