Is CNBC For Sale?

There may be some major changes in the NBC ownership structure according to media and financial pundits. Even as General Electric is dealing with significant balance sheet problems, which have been temporarily swept under the rug compliments of unjustified Goldman Sachs stock upgrades, it may be looking at getting rid of its "vanity play", the NBC TV station family, which of course includes CNBC. According to MarketWatch:

Even in good times, NBC can seem to resemble a loose shirttail in GE's body of assets. If you could figure out why GE has dubbed NBC a "core asset," then feel free to call GE CEO Jeffrey Immelt. He's likely wondering at times, too.

NBC's image was shaken in July when Ben Silverman, co-head of NBC's entertainment operation, exited the network. The Wall Street Journal observed that the executive's departure was "ending one of broadcast TV's high-profile experiments in re-inventing itself as its dominance continues to wane."

And while NBC is having few and far between successes, even as the popularity of the mainstay "Tonight Show" drops (from 18 million viewers down to 6 million), the network's other presumably profitable channels, CNBC in particular, have also seen a dramatic drop in their viewer metrics. The melting ice cube of the traditional media core holding has lead MarketWatch to observe the "the key question is when -- not if anymore -- Immelt will sell NBC, whose portfolio includes NBC, MSNBC, CNBC, Bravo and other assets."

Michael Holland adds:

"Immelt has shown that he is capable of disposing things that don't fit the mainstream at GE," Holland pointed out. Holland said Immelt would take seriously the prospect of selling NBC "if he were offered a bid for it today. But now is not the best time. They're not doing that well and valuations are down. This is not time to get a great price.

Unfortunately this very well may be the best time for a media venture, as the market gradually begins its reintroduction with gravity. Recall that Harbinger recently sold a major stake of its NYT holdings: it appears others have top ticked the media market. Jeff Immelt is likely not too far behind Phil Falcone in this regard. As such, it is unlikely that valuations will increase markedly from this point on. The only question is who will acquire the NBC family, and whether subsidiary companies such as CNBC and MSNBC will be included in the package. At first blush, it does not seem a practical move, as most major networks have been developing their own business related channels: if anything, the probability of selective picking off of specific anchors and personalities would make much more sense, than paying for the "intangible" value of a station like CNBC, which over the past 6 months has attained a definitive reputation of selective reporting bias and prejudice.

Perhaps this is the moment for CNBC to start being an objective TV station once again. After all, that is the only way it can hope to regain its floundering viewership. Yet, while it is caught in the Catch 22 of being a subsidiary of one of the most financially troubled conglomerates, the likelihood that it will promote objectivity and diligent reporting is next to negligible: GE has nothing to gain from CNBC spreading the truth about the domestic economy without 10 shades of rosiness. Thus CNBC is caught in a toxic spiral, whereby its value drops every single day it remains a GE sub. And Jeff Immelt is likely very much aware of this phenomenon. Which is why readers should not be too surprised if in the next several weeks or months Bob Pisani uses his "victory for the bulls" catchphrase a mere 10 times per day or less, as it may very well be time for a strategic shift in orientation of CNBC, and quite possibly, an outright sale.

h/t AsiaBlues