Despite being one of the most visible studios in Hollywood and the only one that fully opens its gates to tourists every day, Universal Studios has seemingly always been a bit shaky when it comes to the business side of things. It was founded in 1912 by Carl Laemmle in New Jersey. Its first cash crunch began as a result of Thomas Edison's overzealous patent lawsuits. Edison felt that every film studio should pay him a royalty for using his or anyone else's film cameras over and above the cost of buying one. Carl Laemmle decided to pack up and move his studio as far away as he could- to Southern California. Not only would it provide adequate distance from Edison's goons, the climate would permit year round production.
Laemmle setup shop on a former egg ranch in the Hollywood Hills, running the ranch alongside his studio until he could finally afford to close it. Mr. Laemmle's money problems would only increase, however, and he was ousted from his studio. Universal was merged with the smaller International Pictures, becoming Universal International.
As the media landscape started to shift in the 1950's, Hollywood Studios became a hot commodity for mergers and acquisitions. Universal was no exception and it soon found itself acquired by MCA, which at the time was solely involved in the recording industry.
MCA's reign would prove to be lucrative and successful. Universal would see some of its most successful years as part of MCA. By the late 1980's the hip new fad was for Japanese electronic firms to buy Hollywood Studios. Sony purchased Columbia Pictures and Universal Studios caught the eye of Matsushita Electronics, better known as the parent company of Panasonic in the United States.
While the Sony/Columbia deal would prove successful, Matsushita's acquisition of Universal would be disastrous. The United States was going through a recession from 1988 through 1992 and Matsushita's clumsy attempts to integrate its new purchase with the rest of the company proved disastrous. Enter the French water company Vivendi. Control of Vivendi had recently been inherited by the younger generation of the billionaire family that founded it. The new generation was bored with running water utilities and wanted to bask in the glow of Tinseltown. This purchase was even more disastrous and almost took down both Vivendi and Universal.
The company's savior would be General Electric. GE had been struggling with its NBC division and feared that it would not be able to sell the network at all. In fact, some feared that it would have to pay someone to take the network off its hands. It sought to round out NBC's offerings to make it healthy and salable. Vivendi was desperately looking for cash so the merger was a match made in heaven. GE bought Universal and merged it with NBC.
The deal worked. Both sides balanced each other out, creating a more desirable business that could be easily sold. Comcast, facing its own issues and unpopularity wanted to branch out into content and NBCUniversal was just what it needed.
