Someone whom I consider very smart about Hollywood tonight emailed me a contrarian analysis about the GE/Vivendi deal just concluded. He factors in ex-NBCU chief Bob Wright's foresight to prop up NBC with cable acquisitions -- a template Jeff Zucker slavishly followed and ridiculously took credit for:

vivendi-logo-1I think GE made a great deal and Vivendi got screwed.

This now closes the chapter on the deal Vivendi made in 2004 to sell Universal to GE. Universal was valued at $14 billion then (most of which related to its ownership of the USA Network and Sci Fi Channel). GE bought it for $5.2 billion in cash and debt assumed, plus giving Vivendi a 20% stake in the new NBC Universal entity (valued at $44 billion in total, so Vivendi’s notional share was $8.8 billion).

General_Electric_logoVivendi’s rationale for accepting this deal instead of all-cash offers from Comcast and Cablevision was that it had such faith in GE management that it was sure its 20% stake would grow over time. So they wanted to ride that upside. Obviously they did not count on NBC’s disastrous management team destroying roughly $17 billion+ in value (adding in their investments in Oxygen, Weather Channel, iVillage and others, and given the $30 billion valuation now agreed with Comcast).

So with its 20% stake now worth $5.8 billion, they wound up selling Universal to GE for $11 billion. That's a shockingly low number, particularly considering it has been the former Universal assets which provide most of the earnings for NBCU now (particularly USA and Syfy).

Credit Bob Wright for having had the foresight to see NBC was headed off a cliff and snookering Vivendi at a time when they were extremely vulnerable.