For those who haven’t been following along, here’s what we know about Vevo:

• It will be powered by Google’s (GOOG) YouTube, which will share ad revenue with the joint venture.
• It is being run by Rio Caraeff, Universal’s veteran digital guy.
• In addition to its equity partnership, its distribution strategy is modeled after Hulu: Sony and Universal videos will appear exclusively on the site and/or YouTube, but the site plans on licensing its stream to other outlets, as Hulu does with portals like MySpace and Comcast’s (CMCSA) Fancast. One obvious place to license the stuff: Hulu itself.
• Neither EMI nor Warner Music Group (WMG), which has created its own Vevo-like channel with YouTube, is participating in the venture, but they could.

But will they actually pay up? Here, the conventional wisdom is not so helpful. Nor are studies predicting consumer behavior. To wit:

• Nearly 50 percent of U.S. Web users are willing to pay for online news, says the Boston Consulting Group.
• Not a chance, says Forrester (FORR): Try 20 percent.

For what it’s worth, my money’s on the Forrester number, or one that’s even lower. My gut says people love consuming news, but only in the broadest sense–Obama doesn’t really Twitter! What was Belichick thinking?–and that sort of stuff, which appeals to a very large audience, will always be free, and you’ll get it from Google (GOOG) or something like Yahoo (YHOO). Which leaves you with a small audience willing to pay for everything else.

But! We should note that people are indeed paying for “content” right now. In fact, they’re paying for a lot of it: $115 a month, up seven percent from last year, says NPD Group. The breakdown:

As of August 2009, 81 percent of U.S. households subscribed to a television service (satellite TV, basic/premium cable, or fiber-optic television service). A similar percentage of households (76 percent) paid for Internet subscriptions. Seventeen percent subscribed to an online music service or satellite radio; and 14 percent subscribed to online gaming subscription services.

More traditional forms of entertainment subscriptions, however, did not fare so well. The number of people subscribing to newspapers fell by 2 percentage points to reach 29 percent in August 2009. Forty-one percent of consumers subscribed to magazines this year, compared to 43 percent who did so last year.

According to NPD, an influx of new smartphone owners has led to an increase in mobile data-plan subscriptions: 9 percent of U.S. consumers had mobile data subscriptions this year, versus just 6 percent last year. Fourteen percent of consumers subscribed to a home-video subscription service, like Netflix, this year, which is 2 percentage points higher than last year.

Ah, see? Problem solved: If you want Americans to pony up for stuff on the Web, just link it to something they’re already paying for, like their cable or Internet subscription.

This is what smart guys like John Malone have been talking about for a while, and it’s also the core of the strategy behind the Time Warner (TWX)/Comcast (CMCSA)/everyone else “TV Everywhere” gambit. But it’s also what many people have been trying to do for a very long time–ask the music industry–with limited success.

The former French water utility has the ability to hold up the deal due to its 20 percent stake in NBCU and a put option that gives it the right to sell the stake back to back to GE (GE), hang on to it or take the thing public.

There’s no reason for Vivendi to do anything but the first option, but the company is not going to come out and say so, which means that negotiations for GE to buy the stake aren’t going as fast as it or Comcast (CMCSA) would like. Vivendi itself wrote down the value of the stake by a few billion earlier this year, but that was then, and this is now. New York Post:

The deal, which many assumed would be announced today, is being held up because Vivendi is playing hardball in its negotiations with GE, said several sources close to the deal.

“They’re trying to squeeze every nickel they can out of GE,” said one of these sources. “Why wouldn’t they?”

But again, there’s no reason for this deal not to get done, and Vivendi itself made a strong case for it on Friday by announcing plans to spend some $4 billion on Brazilian telecom GVT. The proceeds of a $6 billion sale sure could come in handy for that, no?

While we’re at it: I wouldn’t read all that much into reports that Comcast plans to appoint current NBCU head Jeff Zucker to run the new business. Perhaps they really do. But even if Comcast didn’t, it would have no choice but to say it does. Remember that any deal will take a very long time to clear regulatory review and that someone has to keep running NBCU in the meantime. This stuff will get more meaningful when we’re closer to showtime.

The deal will be structured as a joint venture, and Scripps (SNI) will kick $181 million into the new partnership; it will then issue another $878 million in debt.

Scripps itself frequently pops up as an acquisition candidate, and that chatter has only gotten louder as a new wave of consolidation appears to be in motion, prompted by Comcast’s (CMCSA) pursuit of GE’s (GE) NBC Universal.

Scripps, which had planned on announcing quarterly results this morning, is pushing back its earnings call till tomorrow morning.

Here’s the full press release:

CINCINNATI–(BUSINESS WIRE)–Scripps Networks Interactive Inc, owner and operator of the Food Network and HGTV lifestyle television networks, will enter into a joint venture with Cox Communications Inc. by which it will acquire a controlling interest in the Travel Channel.

The two companies today signed a definitive agreement that, upon completion, will result in Scripps Networks Interactive owning 65 percent of the Travel Channel and Cox Communications retaining a 35 percent minority stake in the network.

The Travel Channel transaction is expected to be completed by or before January 2010.

“Combining the Travel Channel with Food Network and HGTV will make our fast-growing, young company the undisputed global leader in lifestyle programming,” said Kenneth W. Lowe, chairman, president and chief executive officer of Scripps Networks Interactive. “This collection of popular lifestyle networks will be in great demand worldwide and promises to create substantial long-term value for all of our stakeholders.”

Launched in 1987, Travel Channel has grown to become one of America’s best known cable television networks and today reaches about 95 million U.S. television households. The television network–the cornerstone of Travel Channel Media–supports a growing range of cross-platform initiatives including Internet, mobile and social media applications.

“Adding the Travel Channel, and its related enterprises, provides us with a unique opportunity to meaningfully expand our portfolio into a lifestyle category that’s highly desirable to media consumers, advertisers and programming distributors,” Lowe said. “Our vision for Travel follows the same script that’s made Food Network and HGTV two ofthe most powerful brands in all of television. By lending our unparalleled expertise in developing successful lifestyle media businesses, we have every confidence that we can build on Travel’s strong brand identity and leverage the successes achieved to date by the top-notch team at Travel Channel and our new partners at Cox Communications.”

As proposed, the transaction is structured as a leveraged joint venture between Scripps Networks Interactive and Cox Communications.

Cox will contribute the Travel Channel, valued at $975 million, and Scripps Networks Interactive will contribute $181 million in cash to a newly created partnership. The partnership, in turn, will take on $878 million in third-party debt that will be guaranteed by Scripps and indemnified by Cox, with the proceeds to be distributed to Cox.

The transaction will result in the partnership having about $696 million in net debt.

“This solid partnership that we’re establishing today allows us to maintain an interest in Travel Channel while at the same time giving the network an opportunity to leverage the resources and expertise of a successful programmer like Scripps Networks Interactive,” said Cox Communications President Patrick Esser. “Scripps has an outstanding reputation as a company, an employer and a programmer. Over the past 15 years, Scripps Networks Interactive has built a portfolio of leading lifestyle programming brands, and we think this complementary expertise will be a boon to Travel Channel’s future growth.”

Scripps Networks Interactive will control the joint venture and the network will be run as part of the company’s growing portfolio of popular lifestyle media brands.

“The incredibly complementary nature of our lifestyle media businesses presents an abundance of opportunity to provide services for Travel Channel that will result in increased advertising and affiliate revenues and substantial cost synergies,” Lowe said. “We have extensive experience working with partners to build value over the long term. Among cable companies, Cox has an outstanding reputation for its vision and investment for the long-term success of its businesses. We look forward to partnering with them in this venture.”

Scripps Networks Interactive was advised on the transaction by Barclays Capital Inc. and Skadden, Arps, Slate Meagher & Flom LLP.

Comcast did have reasonably good news to deliver this morning. It signed up more new customers than Wall Street expected, though it had to cut prices to do so. We’ll see if that mollifies investors, who really have been salty–look what’s happened to CMCSA shares since news of the GE (GE) transaction broke:

Since Comcast barely addressed the NBCU deal during its earnings call this morning, it had more time to tackle other topics. A recurring theme: How would increased Web video consumption affect the company?

The answer: No one knows, exactly.

On the one hand, there’s the threat that consumers will be less likely to pay for cable TV if they’re getting their shows over the Web, whether it’s through illegal streams or legitimate “over the top” services like the one Apple (AAPL) is trying to assemble.

That’s why Comcast CEO Brian Roberts described his company’s “authentication” efforts, which are in a beta test now but are scheduled to go nationwide next month, as an effort to make sure that people who consume Web video do so “in a way that secures the existing model.”

That is–he’d like them to keep paying Comcast for a TV subscription even though they’re watching shows online. Tough sell.

On the other hand, even if you stop paying for cable TV, you still have to pay someone to connect you to the Web, and it’s very likely that company will be Comcast. And if you’re not paying Comcast for TV, there’s a very good chance you’ll pay more for your Internet connection.

“I’ve been saying for a long time that I think video over the Internet is more friend than foe,” Roberts said this morning. Let’s see if Wall Street agrees.

The pitch is straightforward: The newsletter will bring you one cool and/or useful online site, service, app, etc., per day. The alpha versions I’ve seen suggest that subscribers try out the likes of Gazelle, Zeni Optical, and Hazelmail.

If the concept sounds familiar, it should. There are several popular Web sites, like Gawker Media’s Lifehacker, that tread similar thematic ground.

And there are many variants in newsletter industry. Very Short List, the newsletter started by IAC (IACI) and now owned by the Observer Media Group, offers up a cool book, movie, video, etc., per day; DailyCandy, now owned by Comcast (CMCSA), tells its subscribers about cool sample sales and boutiques; Thrillist*, the DailyCandy for dudes, informs dudes about cool restaurants, bars, etc.

One other commonality: This newsletter business, like many others, is getting a boost from Bob Pittman’s Pilot Group. The investment fund, which has invested in newsletters, including Daily Candy and Thrillist, owns a piece of Recognition Media, the New York company that produces the annual Webby awards, among other silly/serious events.

*Your story is coming, Ben. Patience!

[Image credit: polmuadi]

Alas, the Foursquare conference, hosted by the Quadrangle PE fund, is an invitation-only affair. And the event, which kicks off tomorrow, is closed to the press except for reporters onstage to interview the stars. And those conversations don’t get released to the public.

That’s a particular bummer this time. Because the Quadrangle guys–who have had a rough year–had the foresight to get a lineup that includes GE (GE) CEO Jeff Immelt, who appears to be in the final stages of selling NBC Universal to Comcast (CMCSA) CEO Brian Roberts, who will also be onstage. Sure would be nice to hear what they say.

Another panel that piques my interest, if only because of the title: “Are Popularity and Profitability Correlated?” It features Twitter’s Stone, LinkedIn founder Reid Hoffman and YouTube co-founder Chad Hurley. And would-be moguls are represented by a start-up pitch panel that includes Dennis Crowley of Foursquare, the superbuzzy mobile service whose name has nothing to do with Quadrangle’s conference.

So once again, here’s the complete list of those you won’t be hearing from this week as they gather at the Plaza in Manhattan. Unless, perhaps, one of my more ambitious colleagues sneaks in–I’m thinking of you, Bobby MacMillan–and gets us a first-hand account.

2009 SPEAKERS
EMILIO AZCÁRRAGA President, Board of Directors and CEO, Grupo Televisa
DENNIS CROWLEY Co-Founder, foursquare
BARRY DILLER Chairman and CEO, IAC; Chairman, Expedia, Inc. and Ticketmaster Entertainment, Inc.
BRIAN DUNN CEO, Best Buy
CHARLES FORMAN Founder, OMGPOP
REED HASTINGS Founder, Chairman and CEO, Netflix
REID HOFFMAN Executive Chairman and Founder, LinkedIn Corporation
CHAD HURLEY CEO and Co-Founder, YouTube
JEFF IMMELT Chairman and CEO, GE
PAUL JACOBS Chairman and CEO, Qualcomm Incorporated
OLLI-PEKKA KALLASVUO President and CEO, Nokia
JASON KILAR CEO, Hulu
LESLIE MOONVES President and CEO, CBS Corporation
ANNE MULCAHY Chairman, Xerox Corporation
JAMES MURDOCH Chairman and Chief Executive, Europe & Asia, News Corporation
BRIAN PHILLIPS CEO and Co-Founder, Thread
DAN PORTER CEO, OMGPOP
BRIAN ROBERTS Chairman and CEO, Comcast Corporation
PAUL SAGAN President and CEO, Akamai
ERIC SCHMIDT Chairman and CEO, Google
IVAN SEIDENBERG Chairman and CEO, Verizon Communications
BIZ STONE Co-Founder, Twitter
HOWARD STRINGER Chairman, CEO and President, Sony Corporation
BEN VERWAAYEN CEO, Alcatel-Lucent
DAVID ZASLAV President and CEO, Discovery Communications

MODERATORS
MARC ANDREESSEN General Partner, Andreessen Horowitz
KEN AULETTA Author and Writer, “Annals of Communications”, The New Yorker
MARIA BARTIROMO Anchor, Closing Bell; Host & Managing Editor, Wall Street Journal Report, CNBC
JAMES CITRIN Co-Leader, Board & CEO Practice, North America, Spencer Stuart
DAVID FABER Anchor, Reporter, CNBC
MICHAEL HUBER Co-President and Managing Principal, Quadrangle Group
BECKY QUICK Co-Anchor, Squawk Box, CNBC
GEOFFREY SANDS Director & Leader, Global Media, Entertainment & Information Practice, McKinsey & Co.
JOSHUA L. STEINER Co-President and Managing Principal, Quadrangle Group
GEORGE STEPHANOPOULOS Anchor, This Week; Chief Washington Correspondent, ABC News

That’s the pitch Apple has been making to TV networks in recent weeks. The company is trying to round up support for a monthly subscription service that would deliver TV programs via its multimedia software, multiple sources tell me.

Apple (AAPL) isn’t tying the proposed service to a specific piece of hardware, like its underwhelming Apple TV box or its long-rumored tablet/slate device. Instead, the company is presenting the offer as an extension of its iTunes software and store, which already has 100 million customers.

A so-called “over the top” service could theoretically rival the ones most consumers already  buy from cable TV operators–if Apple is able to get enough buy-in from broadcast and cable TV programmers.

That’s a big if: Apple has told industry executives it wants to launch the service early next year, but I have yet to hear of a single programmer that has made a firm commitment to the company, which has tasked iTunes boss Eddy Cue with promoting the idea.

Industry executives believe that if anyone jumps first, it will be Disney (DIS), since CEO Bob Iger has shown a willingness to experiment with Apple and iTunes in the past: In 2005, Disney was the first player to sell its programming on iTunes, via a-la-carte downloads. And Apple CEO Steve Jobs is Disney’s largest single shareholder, a result of Disney’s 2006 acquisition of Jobs’s Pixar animation studio. Apple didn’t respond to requests for comment.

Network executives I’ve talked to are intrigued by the idea–they are eager to find new revenue streams–but are also wary, for several reasons.

Cable networks, for instance, don’t want to threaten existing relationships and subscription fees from cable providers like Comcast (CMCSA). And programmers are also worried about the effect a subscription service would have on advertising revenue: Even if the service didn’t distribute TV programs until after their initial air date, that could cut into ratings, which now measure viewership over the course of several days.

But the move to deliver TV and movies over the Web is already well under way. Netflix (NFLX), for instance, already bundles free streaming movie and television along with its disc-by-mail subscription service. iTunes and Amazon (AMZN) rent movies on a one-off basis, and Google’s (GOOG) YouTube is trying out the same thing. Meanwhile, Hulu, the joint venture between GE’s (GE) NBC, News Corp.’s (NWS) Fox, and ABC, is figuring out how to launch a paid service that may include rentals, paid downloads or subscriptions.

So Apple’s proposed subscription service, which the company has floated in the past, is no longer a huge stretch. Says one executive briefed on the company’s plans: “I think they might get it right this time.”

Is Hulu putting up a pay wall around its Web TV site? Nope.

Does Hulu want to charge people to watch Web TV? Yes.

Confused? Don’t be.

It’s pretty straightforward: Hulu, the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC, doesn’t plan on charging people to watch the stuff it’s currently airing on the site–a mix of first-run shows from broadcast TV, a limited number of cable TV shows and a smattering of movies. But Hulu is trying to figure out how to create some kind of premium offering where you’ll pay for stuff that isn’t on the site right now.

That’s what Hulu’s backers have been saying for months, so it’s a little puzzling that News Corp. COO Chase Carey’s comments got folks worked up yesterday. Meanwhile, multiple sources familiar with Hulu’s plans tell me that…Hulu doesn’t actually have a plan yet, but it is trying to piece one together.

There are some pretty obvious ways to go here. Hulu could sell movies or TV shows on a pay-per-view basis, or it could sell subscriptions to shows it doesn’t offer now or to a deeper offering of shows it already has. You could call it “Hulu Plus” (no charge for that one, guys).

If you’re a fan of Fox’s “Family Guy,” for instance, Hulu is only of limited help: The site only has the most recent five episodes. So how much would you pay to watch the rest of them?

If you don’t have an answer for that, don’t worry–Team Hulu doesn’t know, either. Nor can they tell you if airing free shows on Hulu has cut into other revenue streams like broadcast TV advertising or DVD sales, even though “we’ve done a thousand regression analyses on this,” says an industry executive involved in the site.

Do bear in mind that this was a problem Hulu’s backers didn’t really envision when they were dreaming up the site; at the time, they were most concerned with building a video site that would allow them to barter with Google (GOOG) and Apple (AAPL).

Now they own one of the biggest video sites on the Web, one they say is performing ahead of plan. And Hulu is selling enough advertising that it’s coming close to reaching break-even, according to executives I spoke to this week.

But at the very least, adding a pay component to Hulu helps mollify those who fear the site is cannibalizing their existing businesses. Or who simply want another revenue stream. And a pay element dovetails with Hulu’s interest in joining up with the “authentication” movement pushed by cable guys like Comcast (CMCSA) and Time Warner (TWX).

Meanwhile, here’s the use case for Hulu that its backers originally envisioned–“catch up viewing.” I was on a plane when last night’s episode of the “The Office” aired, but I can watch the whole thing–with ads I can’t skip–on my laptop today. And so can you:

The numbers, via parent company GE’s (GE) release this morning: NBCU posted a $732 million operating profit, up 13 percent year over year, on revenue of $4 billion, which is down 20 percent. Important footnote: As GE explained during its earnings call, if you adjust NBCU’s performance for one-time gains, operating profit would actually be down nine percent.

Still, even that result is an improvement over previous quarters. So perhaps those numbers will cheer Comcast investors, who have been beating up the cable company ever since news of its talks to buy NBCU surfaced last month.

GE usually spends very little time discussing NBCU’s performance during its earnings calls, since investors are much more concerned with the rest of the company’s performance, and in particular, its troubled finance arm. But perhaps the pending Comcast (CMCSA) deal will change that this time around.

Some notes from the earnings call: GE CEO Jeff Immelt has joined the “recession is over” crowd, but only mentioned NBCU briefly during his opening statement. He says scatter pricing–ads that marketers buy during the TV season, as opposed to the spring “upfronts”–is “better.”

GE booked a $283 million one-time gain from the sale of some of its stake in the A&E cable channel. And it took charges on write-downs related to its stake in NDTV, its Indian TV investment, as well as the Weather Channel, which it bought alongside some private equity groups for $3.5 billion last year. But the company still ends up $89 million ahead in the one-time events column–the equivalent of a penny per share of earnings.

And as the company explains in the table below, if you take out the one-time gains, NBCU’s quarterly profit increase turns into a loss. This is a reverse of previous quarters, when the company told investors to ignore one-time losses that made horrible earnings look even worse.

More color on the scatter market: CFO Keith Sherin says Q4 pricing is up “double digits” for primetime TV spots, and more than 20 percent for cable TV.

Asked a vague question about the proposed NBCU deal, Immelt gave a vague answer, noting that while “NBCU is a great franchise that’s consistently delivered income growth and cash…we always evaluate our portfolio.” He then suggested that GE doesn’t need to sell NBCU, which is the right thing to say. “We just want to be ready for several scenarios….We don’t have a specific pronouncement, or a specific need for cash.”

Here’s GE’s broad-stroke description of NBCU’s quarter (click to enlarge):

At a TVWeek conference in Manhattan, Bewkes repeated arguments he has made in the past: Chiefly, that big media mergers have a lousy track record and that he couldn’t see how Comcast (CMCSA) could unlock any value by buying a majority stake in NBC Universal from GE (GE).

“Somebody has finally noticed that these things don’t work out so well,” he said, adding “We love to see our competitors taking risks.”

But just to hammer that point home, Bewkes compared the proposed deal to the one his company made nine years ago when it embarked on an ill-fated merger with AOL. That deal (made when Bewkes was running Time Warner’s HBO unit)  “basically made no sense” at the time, he said.

The main talking point in favor of that transaction–that connecting Time Warner’s content with AOL’s Internet distribution would create synergy–was “nonsensical,” he said. But “these kind of arguments, you’ll hear some of them this week, in the other merger that we’ve been talking about,” Bewkes said.

Clear enough?

Wall Street, by the way, remains unimpressed with the proposed deal as well: Comcast shares are down about 10 percent since word got out.

In other reiteration news, Bewkes also said, again, that he doesn’t plan on selling his Time Inc. publishing unit. Though he left himself a tiny window of wiggling room by noting that “no public company can ever say that it wouldn’t consider restructuring some part, whether it’s Warner, HBO, whatever.”

But Bewkes insisted that Time Inc.’s best-known magazine brands, including “Time, People, Sports Illustrated, InStyle,” are holding their own as print products and that the challenge will be turning them into online successes.

“We have basically a healthy business in terms of our relationship with readers. These brands mean something and they’re evolving…,” he said. “If you can’t take the leading titles that people have known for decades, and use the new world to make them relevant, really, shame on us.”

For the record: Disney (DIS) says it always intended to move the company, which offers “bite-sized ideas for green living” via email and a Web site, from its corporate strategy group to its interactive division, which will happen later this year. At that point, “it will still continue in some form,” says spokesman Michelle Bergman.

That doesn’t sound good. Disney says it plans to conduct a review of the unit, so it’s not ready to answer some basic questions about the email newsletter company. Like: Are co-founders Heather Stephenson (who lives and works in San Francisco) and Jennifer Boulden (who until this summer lived and worked in Bozeman, Mont.; she’s now in Los Angeles, I’m told) staying on? Will Disney have to take a write-down on the property? Will there be layoffs? “It’s too early to say. I can’t tell you,” Bergman says.

Okay. But If I had to bet, I’d say at least some of the dozen-plus employees will be hitting the job market.

Disney paid a reported $20 million for the property a year and a half ago, and the plan was to create a big green-centered business around it, but that hasn’t panned out, sources said. The company, founded in 2005, is one of the many lifestyle newsletter businesses backed by Bob Pittman’s Pilot Group.

Comcast (CMCSA) bought DailyCandy, the best known of Pittman’s stable, for $125 million a little more than a year ago. That was surely one of the last “pre-Lehman” Web 2.0 M&A deals, but grunts and murmurs out of Philadelphia and Pilot indicate the business has held up during the recession. And Thrillist, a “DailyCandy for dudes” effort that has yet to sell, seems to be booming.

As it is, now that investors and analysts have heard the more plausible deal–instead of buying NBCU for $35 billion, the cable giant kicks in up to $6 billion in cash, plus its cable networks, and gets 51 percent of NBCU–they’ve decided they hate that one, too.

Here’s the story in the graphic form (click chart to enlarge):

The Comcast-NBCU story broke after the market closed on Wednesday, in case that wasn’t clear. As I’m typing this, Comcast (CMCSA) is trading around $15.6 a share, down some seven percent since the talks became public.

Pull back a bit and you see that things could be much worse: As recently as March, Comcast was down below $12, and there wasn’t any multibillion dollar deal weighing down the shares then.

If anything, investors are much more forgiving to Comcast here than the professional chattering class of writers and analysts, who hate the deal. The conventional wisdom: Comcast’s dream of marrying cable programming with its cable service is misguided because media conglomerates like Time Warner (TWX) and News Corp (NWS) have already tried it and concluded that it didn’t work. If the Roberts family spends money on anything, they argue, it ought to be on shareholders, either via dividends or by buying back shares.

Here’s a sampling of today’s sentiments:

Pali Capital’s Rich Greenfield:

Comcast is trying to become a massive player in content…a move that investors should be frightened about, regardless of the initial “math” surrounding the transaction.

Barclays Capital Vijay Jayant:

Press reports of this potential transaction give credence to investor concerns that management has empire-building aspirations in general or that they may not believe enough in their own distribution business over the long term and therefore need to diversify their portfolio holdings…fundamentally, we believe that Comcast shareholders would be better served if the company were to invest in its own shares.

So if this is a trial balloon, you wouldn’t say it has been shot down completely. But it’s certainly sagging.

Could Comcast (CMCSA) be talking to NBC Universal about…something? Could be–that’s what the Los Angeles Times and other outlets reported last night.

And Comcast’s statement says there’s no “deal,” which doesn’t preclude “talks about deals.” Then again, it’s awfully unusual for a company in Comcast’s position to say anything at all.

Clear as mud? Then this won’t help. Check out these comments from Comcast COO Steve Burke at a Sept. 9 conference hosted by Bank of America (BAC) where analyst Jessica Reif-Cohen asked him about his appetite for acquisitions.

Burke said he’d love get more cable channels (like the kind NBCU owns). And he said he didn’t want a really big deal that would require the company to use its shares or take on a lot of debt (like, say, a $35 billion deal for NBCU). He said all this, by the way, in the span of a single answer.

I’ll carve it up and translate for you:

We’ve had plenty of debt, and we don’t want any more right now, thank you very much.

Well, if you look at cable companies over the last 10 or 20 years–I joined the Company 11 years ago. It is really amazing how deleveraged our Company and other cable companies have gotten….We like where we are from a leverage point of view and I think [we] would be uncomfortable if our leverage was significantly higher.

But boy oh boy, are cable channels attractive!

At our core, we believe that content and distribution work well together….I think there are a lot of case studies where content and distribution, particularly in a world where the distribution has technology that can deliver content in new and innovative ways, you really can create a lot of value by putting content and distribution together, particularly if that content is cable content.

And again, when you look at the big media companies, the best businesses that all of us have in the entertainment business I think are the cable content channels and those channels with that dual revenue stream are really good businesses. And I think we wouldn’t be doing our job if we didn’t try to figure out a way to get bigger in those businesses. Those businesses are growing more rapidly than our cable business and if the opportunity came about where we could add cable content to our portfolio, I think we would do it.

But really, we’re not in the market for a mega-deal.

Just to sort of get it right out there, I don’t think that means doing a big deal with our stock. I think all of us think our stock is significantly undervalued. So I don’t think that means doing a big deal with our stock. I also don’t think that means doing a big $50 billion acquisition. I think it is more trying to find opportunities that are complementary with our core business, that don’t take our balance sheet and push it back into a position, which we have worked so hard to get it down.

Never say never!

We are going to try to make sure that we are disciplined and we have high IRRs and good free cash flow generation and we will see if anything comes available. If it does, we will certainly look at it.

Got it? Me either. The only way I can reconcile Burke’s comments with the notion that Comcast is interested in an NBCU deal would be if Comcast was talking about buying Vivendi’s 20 percent stake in the NBCU.

Comcast could swing that one without breaking the bank–the conventional wisdom is that it would cost something in the $5 billion range. And it would technically increase Comcast’s cable network holdings, as Burke says he wants to do. But not really: Comcast would be a minority shareholder with no clear path to control. And it wouldn’t get the “distribution plus content” benefit Burke was talking about last month.

Anyone else have any ideas? Feel free to sound off below.

The deal was hammered out by reps at a Tuesday meeting, Waxman reports, citing “two individuals informed about the meeting.” The $35 billion price tag happens to be the value that a recent JP Morgan report assigned to the company.

Comcast (CMCSA), in a statement, says the story is untrue: “While we do not normally comment on M&A rumors, the report that Comcast has a deal to purchase NBC Universal is inaccurate.” NBC Universal has no comment.

Clintonian parsers will note that Comcast’s denial has potential wiggle room: It isn’t denying, for instance, that the two companies had or are having talks. On the other hand, this is exactly the situation where corporate PR protocol calls for the “we don’t comment on market rumor and speculation” line. That way, you have the option of updating your statement if the story does turn out to be true. And for what it’s worth, I can’t recall the last time I saw a big, publicly traded company respond to an M&A story with this specificity.

UPDATE: The Los Angeles Times’s Joe Flint now says that Comcast is “kicking the tires” at NBCU, according to ”people familiar with the situation.” His report is much more hedged than Waxman’s.

All that said, this is a tie-up that has a first-blush logic to it: Comcast is flush with cash and could presumably take on more debt if it wanted to, and the company has shown an interest in branching out into content before. In 2004, it made a run at Disney (DIS). And the drumbeat for GE (GE) to dump its 80 percent stake in NBCU has been more or less constant, even while the industrial conglomerate insisted it had no interest in selling.

Those drumbeats get louder every year around this time, by the way. That’s because Vivendi, which owns the remaining 20 percent stake in NBCU, has a put option that kicks in every November and that could theoretically force GE into buying out the stake or spinning the whole thing out to the public.

More theoretical ammunition for a deal: Comcast is one of the few potential buyers that could swallow up all of NBCU. While there might be lots of people interested in NBCU’s cable properties (USA, Bravo, SciFi, etc.), there aren’t many who also want the company’s flailing broadcast property.

And while Universal’s film library is potentially attractive to some buyers, many of them–like Time Warner (TWX), for instance–have no interest in the film studio because they already have one.

If you want to play out the theoretical implications for digital, things could get very interesting. NBC is one of the founding partners at Hulu, the free Web TV portal that’s caused consternation for Comcast and other cable providers, which worry that the site is undermining the value of the TV programming they spend big money on. And Comcast and Time Warner have been trying out a “TV Everywhere” strategy that is, in part, a reaction to Hulu’s initial success. But let’s let the dust settle for a minute before we head in that direction.