H. Wayne Huizenga School of Business and Entrepreneurship
For the over past decade cable television industry has experienced restructuring through a large number of creative innovation, mergers and acquisitions. For the purpose of understanding both legal and ethical issues in regards to such a merger in the US cable television industry, this study employs a very detailed legal and ethical examination of a merger between Comcast and Universal. This merger, proposed on December 3rd 2009 would create the world’s largest media conglomerate with the largest cable distribution would include some of the world’s most popular entertainment, news and sports content, movies and film libraries system market in the US. This sparked fear of reducing competition through market foreclosure and thus harm consumers. However, the merger may also create efficiency gains which benefit consumers. There are a lot of legal and ethical ramifications of such a large merger. We applied analyses of Legal, Ethical and Social Responsibility issues surrounding such a merger. The analyses concluded that: first, obviously this merger has already been approved by the FCC already. FCC approving the merger kind of quelled legal issues that many assume will come with such a merger. Keywords: Merger, Comcast, legal, ethics, FCC, NBC Universal.
Table of Contents
II.Comcast-NBC Merger - Legal aspects of its mergers 7
III.Comcast-NBC Merger - Ethics Models 13
A.Utilitarian Ethical Analysis 15
B.Kantian Ethical Analysis 23
C.Natural Law Analysis27
IV.Social Responsibility 31
Integrating Values - The Legality, Morality, and Social Responsibility of Comcast-NBC Universal Merger I.Introduction
On January 18th, the FCC approved a merger between two companies that can result into an entertainment conglomerate. If you take Comcast a well-known company for being the largest cable operator, home internet service provider, and fourth largest home telephone service provider in the United States, providing cable television, broadband Internet, and telephone service to both residential and commercial customers in 39 states and the District of Columbia; than mix in NBC Universal, a media and entertainment company engaged in the production and marketing of entertainment, news, and information products and services to a global customer base. The company owns and operates American television networks, numerous cable channels, and a group of local stations in the United States, as well as motion picture companies, several television production companies, and branded theme parks. Two companies that are in the same industry but operate within different sectors of that industry. Creates the potential for something big, in the Comcast-NBC merger presents a special case because it combines a distribution network with substantial programming assets, including TV stations, cable channels and a major broadcast network. Many fear that this degree of vertical integration could distort the competitive marketplace through the extensive aggregation of content with distribution.
Table 1.0 – Comcast Direct Competitor comparison
Comcast Direct Competitor Comparison
Direct TVDISH Network
Qtrly Rev Growth (yoy):50.50%12.90%5.50%N/A16.90%
Gross Margin (ttm):55.36%49.77%41.58%N/A48.76%
Operating Margin (ttm):20.47%16.72%18.13%N/A18.61%
Net Income (ttm):3.85B2.47B1.30B1.31B1N/A
Source Yahoo Financial: http://finance.yahoo.com/q/co?s=CMCSA+Competitors
Table 1 illustrates the large share that...