News Corp President Chase Carey said on Thursday a deal that would give Comcast Corp control over NBC Universal could end up being burdened by regulatory conditions.
Comcast and General Electric Co have been in talks to reach a deal that would give the cable operator a 51 percent stake in a $30 billion NBC Universal joint venture, according to people familiar with the discussions. Comcast would contribute its cable networks and $4 billion to $6 billion in cash.
Carey, the No. 2 executive at News Corp and a media industry veteran, said he would be stunned if such a deal did not encounter fairly significant regulatory baggage.
News Corp itself is said to have previously looked at NBC Universal but has since backed off, according to media reports.
Speaking at the Money & Media Conference in New York, Carey said a deal for NBC Universal would make sense for Comcast. He also said it was unlikely Comcast would be asked to sell any assets as a condition for approval.
Instead, he said regulators would likely focus on making certain that Comcast ensures fair access for rivals to the content it controls as well as fair access to the largest distribution network in the United States.
If Comcast, the No. 1 U.S. cable operator, struck a deal for NBC Universal, it would gain control over the NBC broadcast network as well as a host of cable networks, a movie studio and local TV stations.
Given the size and reach of the combination, the U.S. Federal Communications Commission as well as antitrust regulators and possibly Congress would likely review the deal.
Carey is no stranger to antitrust reviews. He previously held top positions at U.S. satellite TV operator DirecTV Group Inc, in which News Corp purchased a controlling interest in 2003, following a regulatory review.
Carey said other issues that might come up include Net neutrality, which advocates push to ensure that Internet service providers do not discriminate or favor any content moving over their networks.
Comcast is also the largest residential Internet service provider in the United States.
Investors and analysts have expressed concern that the combination of Comcast and NBC Universal could lead to regulators making demands that could hurt the potential value of the synergy created by having content and distribution under one roof.
Closing the deal could take longer than the nine to 12 months Comcast anticipates, as members of Congress and interest groups take potshots at the deal.
At the top of a long list of investor worries, is the fear that the FCC could tie Comcast's hands in negotiating affiliate fee increases with rivals like satellite TV or phone companies.