The Worst Media Deal in History?

Jeffrey Immelt
Photo by Erik Freeland via Getty Images
William D. Cohan
January 12, 2022

Back in October, I shared the story of the first professional masterstroke of David Zaslav, the new King of Hollywood, who was part of the team of legendary GE executives, along with Jack Welch and Bob Wright, who first saw the promise of cable television through their ownership of NBC. In 1989, with Wall Street still enduring one of its periodic post-crash malaises, NBC paid $140 million for half of Chuck Dolan’s Rainbow Properties, a goodie bag of cable assets that contained Bravo, AMC, and other sports broadcasting entities. Welch, Zaz’s mentor, also pushed for deals to acquire Court TV and The History Channel. Welch and Zaslav, among a few others, were also the driving forces behind the creation of both CNBC and MSNBC. When everyone else was playing the linear game, the GE executives foresaw the dawn of the next epoch. 

If GE was clever enough to see around the corners of network television, why wasn’t it able to envision the inevitable pivot toward streaming content over the Internet directly into our homes? This phenomenon, of course, has created behemoths out of the likes of Netflix, Disney, and Zaslav’s about-to-be merged company, Warner Bros. Discovery. In fact, streaming and the streaming wars are pretty much all anyone in Hollywood is talking about these days—and pretty much all that Wall Street is valuing in these companies—as my partner Matt Belloni has documented beautifully

There are two main reasons for GE’s blind spot. Part of the answer lies with personnel. By the time Netflix pioneered the streaming revolution, in and around 2011, the ranks of GE executives had been depleted of its cable pioneers. Welch had retired as GE’s C.E.O. in September 2001; Zaslav left GE in January 2007 to run Discovery; Wright retired as a GE vice-chairman in 2008, having been kicked up and out of NBC years before; and Tom Rogers, who arguably was the most important and visionary cable executive at NBC, left the network in 1999 to become C.E.O. of a magazine publisher before becoming C.E.O. of Tivo. As the old saw goes, “personnel is policy,” and so before Reed Hastings even had the vision to start talking about replacing Netflix’s red envelopes with bits and bytes, GE no longer had the A-team in place to think through the idea of delivering content directly into peoples’ homes through a high-speed cable connection.