NBC in Trouble
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Case Details:
Case Code : BSTR233
Case Length : 24 Pages
Period : 1990-2005
Organization : CBS, NBC, ABC, Fox Broadcasting
Pub Date : 2005
Teaching Note : Not Available
Countries : United States
Industry : Media and Television Broadcasting
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS
GE Acquires NBC
In 1986, General Electric (GE) purchased RCA, mainly to acquire control of NBC, for US$ 6.3 billion. In 1986, Tinker announced his resignation. John F. Welch (Welch), then Chairman of GE, appointed Robert C. Wright, who had been serving as the President of GE Credit Corporation, as the President and CEO of NBC in August 1986...
Wright's Strategy
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Wright, in a bid to focus solely on television, sold NBC's radio network operations to Westwood One in 1988. In the same year, he sold RCA's music network RCA-Victor to Germany-based media company Bertelsmann AG.
He felt that NBC was overstaffed and laid off 150 workers. In 1987, he sold RCA's consumer electronics operations to Thomson.
During this period, the cable television market was growing rapidly. Since its introduction in the late 1970s, cable television had grown to reach 56% of US homes in 1989. The cable channels were grabbing advertising revenues from television networks...
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NBC in the Millennium
The year 2000 brought bad news for NBC. Due to the dotcom bubble bust, Internet advertising fell drastically. The US economy was experiencing a downturn, and a number of online companies were closed. NBCi, which had grown rapidly and employed about 800 employees, also ran into trouble. It lost US$ 662 million in 2000 and a number of employees were laid off...
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Forming NBC Universal
Wright had long been interested in acquiring companies that created content. This was something he couldn't do under Welch.
However, in mid-2003 when Vivendi Universal Entertainment (Vivendi), the French media and telecommunications company, announced the sale of its US entertainment business - Universal Pictures, Universal Parks, Universal Television and a number of cable channels, many US media giants were interested.
Metro Goldwyn Mayer (MGM), Viacom, Liberty Media and NBC competed with each other to acquire Universal's assets... |
Excerpts Contd...
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