PHILADELPHIA — General Electric Co. has promised to buy at least $345 million in advertising from NBC Universal over five years after selling a controlling stake in the entertainment company to Comcast Corp., according to a regulatory filing Friday.
GE pledged to buy at least $59 million worth of ads in the new NBC Universal each year for five years after the sale of a 51 percent stake to Comcast, expected to close in about a year. In addition, GE is required to buy $50 million worth of ads in connection with the 2012 Olympic Games, whose rights NBC holds.
Comcast disclosed the details in a Securities and Exchange Commission filing that also covered terms of GE's divestiture rights for NBC Universal, tax matters, intellectual property and others.
In 2008, GE spent $1.2 billion on advertising across all media outlets, but most of the money went toward marketing of NBC Universal's movies, said TNS Media Intelligence. The regulatory filing did not say whether the $59 million represents an increase or decrease over what it would have spent outside the movie ads.
The filing also said that Comcast can't sell or transfer its stake in NBC Universal for four years and GE is similarly obliged for 3 1/2 years. After that, the companies can either sell all or a portion of their stakes. Comcast can buy out GE entirely in the eighth year after the deal's close.
The new company will get three Comcast-appointed directors and two from GE. If GE's ownership falls below 20 percent, it will have to give up one board seat, and if its stake falls below 10 percent, it will have no representatives on the board. Comcast will take these board seats.
If the CEO job at NBC Universal becomes vacant within the first 3 1/2 years of operations at the new company, GE has the right to veto up to two replacements proposed by Comcast.
A separate SEC filing made by GE shows that NBC Universal already has a commitment from lenders for $9.1 billion in loans. NBC Universal is giving that money to GE, which is buying Vivendi SA's 20 percent stake of the entertainment company for $5.8 billion in order to sell a majority stake to Comcast.
On Thursday, Comcast said it would pay GE $6.5 billion in cash and contribute $7.25 billion worth of assets for control of NBC Universal. Regulators are to expected to review the deal, which would create one of the nation's largest entertainment conglomerates.
Shares of Comcast, based in Philadelphia, were up 22 cents to $16.13 on Friday. GE, based in Fairfield, Conn., was up 20 cents to $16.20.