GE (GE) looks at NBC sale, again

The management at GE (NYSE: GE) is once again considering the future of its NBC Universal entertainment business. According to the FT, the matter will be reviewed after the Beijing Olympics. The reason for that is profits. "The games allow GE to boost sales of its aviation, medical technology and other businesses in China. GE is forecasting $500m in extra sales from Olympics-related contracts, excluding NBC," the FT writes.

Wall Street analysts believe that NBC Universal may be worth as much as $40 billion. GE would have tax considerations if the unit was sold or spun-off as would its public shareholders.

But, the entertainment unit has been a financial dog. It usually performs worse that the overall GE numbers, which means that is probably pulling down the parent's overall valuation. GE has become known for its financial services, medical, and infrastructure businesses. The chorus about how NBC does not fit in goes on and on.

A spin-out or sale of the unit may not make the most sense. NBC may be worth more in pieces. It broadcast unit, stations, cable programming, and studios really are discrete operating entities. Selling them to the highest bidder may be the best way for GE to make money.

Douglas A McIntyre is a partner at 24/7 Wall St.