Is NBC Universal worth $30 billion?

March 4, 2009

French conglomerate Vivendi this week joined a long list of media and entertainment companies that have been forced to write down their book values after suffering a sharp drop in advertising revenue and tumbling share prices, with no immediate turnaround visible on the horizon.

But what caught our eye was a new valuation for NBC Universal implied in the writedown. Vivendi said in its results report that it took 1.503 billion euros off the value of its 20 percent stake in NBC Universal. It didn’t say what the stake was now worth, so we asked our colleague in Paris to check with the company. A Vivendi spokesman said it wrote the NBC stake to around $6 billion in 2008 accounts. By our math, that would value NBC Universal at about $30 billion.

So is NBCU worth $30 billion? What would the TV network, movie studio and theme park owner fetch on the market if GE/Vivendi ever put it up for sale? We’ll leave you to decide, but here’s a graph of the financials for some of the biggest U.S. media companies for comparison.

(Note: According to GE, revenue from NBC Universal was $4.4 billion in the December quarter and segment profit was $865 million)

So does all this mean General Electric is under pressure to write down its stake in NBC Universal? After all, Time Warner took a whopping $25 billion charge and News Corp wrote off some $8.4 billion in assets.

GE spokesman Russell Wilkerson told Reuters there was “no need for a writedown.” GE had $18.97 billion worth of NBC-related goodwill on its books at the end of 2008, according to a filing with the U.S. Securities and Exchange Commission. Vivendi’s valuation puts a price tag of $24 billion on GE’s 80 percent stake in NBC.

(Photo: The GE building at 30 Rockefeller Center where NBC headquarters is located in New York on 14 Oct 2001/REUTERS)

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