Liberty Media Group Chairman John Malone says the NBCU/Comcast deal appears to have been "heavily engineered" and "obviously custom-tailored" for both companies.
Malone was interested in talking with GE about a possible purchase of a controlling stake in NBCU as well, but said GE didn't share that interest.
His comments came in an interview with CNBC's David Faber. The former TCI top executive said the deal would be a way to "de-leverage GE" while giving Comcast some content market power "without betting the farm."
Malone said powering up in content made strategic sense for Comcast, but said an x-factor is how much the government would allow it to use its market power. The Obama Administration has signaled it wants to take a closer look at mergers than its predecessor.
The general theory is that the NBCU/Comcast deal will not be blocked, which Malone said he ascribes to, but that there will be conditions. And not just from the government.
He said the key political issue will be what the NBC affiliates want out of this deal: "What will the broadcast affiliates of NBC say they want [in order] to not fight this transaction."
Malone went beyond the deal to put it in the context of a media marketplace where he says the network broadcast distribution model is broken, and could be remade as an all-cable or hybrid system.
The government could become an ally in the remaking of that model into a cable-centric delivery system. The FCC's broadband team has been talking about migrating TV to multichannel video platforms as one way to get more spectrum back for wireless broadband.
Malone said a key issue is localism and whether the local station model continues to be viable, or whether "everything is going to a cable-type structure and affiliate fees....Will the networks share what they can extract from the distributors with the local affiliates and therefore underwrite their economics, or will they be largely abandoned?," he asked.
"Arithmetically, it is pretty easy," he said. "Slough off the affiliates, get back 100% of the ads. They are all national, which are selling better than local. And you get to program 24/7. You become the most powerful cable network. You eclipse USA."
The current network model doesn't work, he says. "It is going to have to be subsidized."
Citing the rise of the Internet as an advertising competitor, Malone said there are now too many ad-driven businesses in the marketplace to be sustainable. "Maybe four [major broadcast nets] is too many," he told Faber. "Maybe two of these guys just become cable nets and two of them end up with retrans and support localism."