Comcast Proposes Merger With Disney

Jeffrey Rayport, chairman of the business consulting firm Marketspace LLC in Cambridge, Mass., said if the deal is done, it would create an entertainment giant.

"This deal is huge potentially in the sense that it takes a major broadcast network, ABC, it links it up with the No. 1 cable provider in the United States, and Comcast of course with the recent combination with AT&T Broadband now has the better part of 25 million homes in the United States," he said.

"It's another bet that when you bring the world's richest collection — or one of the world's richest collections — of content together with one of the world's most robust platforms for distribution that you've got the chance to dominate the media world in a unique way," Rayport said.

Would Tie-Up Benefit Consumers, or Harm Them?

Some analysts predicted that if the deal went through, it could result in lower rates for cable television subscribers, though one company would control both a good deal of the content available and how it is delivered.

"That's going to change the dynamics of what we see and how much we pay for it, and I think for the most part for the better," said Adam Theer, director of communications studies at the Cato Institute in Washington.

The Consumer Union, though, said the proposed merger could be trouble for the public.

"If this deal goes through it tightens the ownership grip over the most important sources of news, information and entertainment in our country," said Gene Kimmelman, senior public policy director for Consumers Union, which publishes Consumer Reports. "Disney has an enormous package of extremely popular, marquee programming and a national network that would now be owned by the largest cable distributor in the country which has little to no competition in most communities. The potential impact is enormous."

Mark Cooper, of the Consumer Federation of America, said the Comcast bid for Disney is "inevitable," calling it the result of the "policy this [Bush] administration has pursued … to reward really huge, vertically-integrated companies. … There's less and less competition, and virtually no chance anyone else can get into it, with fewer people controlling what the public can see."

As examples of how the public can be hurt by fewer and fewer companies having control of media, Cooper cited Comcast's rejection of an anti-war ad from the Princeton, N.J., based Antiwar Video Fund around the Bush State of the Union address, and CBS's refusal to sell time during the Superbowl to Move.org to run its "child labor" ad slamming the Bush deficit.

Disney released its quarterly earnings report today, listing first quarter revenue at $8.55 billion, compared to $7.1 billion a year ago, and profts at 33 cents, versus 5 cents for the same period last year. Both figures were above the company's estimates.

Comcast today reported a profit of $383 million, or 17 cents per share, for the quarter ending Dec. 31. The company credited the strong demand for its digital cable and high-speed Internet services. Revenues jumped 58 percent to $4.74 billion.

Disney is the parent company of ABCNEWS.com.

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