GE May Be in Talks on NBC Sale : Entertainment: Ex-Fox Chairman Barry Diller and Paramount are trying again to buy the network, sources say.

General Electric is again involved in discussions about the possible sale of the troubled NBC network to former Fox Inc. Chairman Barry Diller or Paramount Communications Inc., sources close to the company said Thursday.

Diller and Paramount were rebuffed in separate efforts to buy NBC earlier this year. However, sources said that in recent weeks both parties have renewed discussions with GE. Those sources stressed that it is premature to predict the outcome.

“There are discussions, but it’s moving very slowly,” said a person close to the talks. “They are nowhere close to fruition.”

Diller and Paramount are apparently discussing substantially different proposals. Diller’s plan is said to involve spinning NBC off to GE shareholders in a non-cash transaction, while Paramount is proposing a more traditional cash purchase.

GE’s asking price is a major obstacle. NBC’s assets are valued at $4 billion on GE’s books, but it is seen as being worth nearly $1 billion less. Any sale would likely trigger a substantial write-down, which GE Chief Executive John F. Welch Jr. opposes.

Diller reportedly approached GE about spinning off or acquiring the network last spring, but the discussions were short-lived. The parties were far apart on price. There were also tax complications.

Diller, reached for comment, said he has “made no proposal” to GE, but he declined further elaboration.

GE said it was company policy not to comment on sale reports, which surface periodically on Wall Street. Paramount also declined comment.

The ability of a studio like Paramount to acquire a TV network is easier now that the Federal Communications Commission has relaxed the government’s so-called financial interest and syndication rules.

Paramount is one of the leading producers of movies and network and syndicated TV shows, in addition to owning 50% of the USA Network, a cable TV channel and six independent TV stations in small- and medium-size markets.

Welch’s unhappiness with NBC’s performance is no secret, and network executives have been privately joking for weeks about a possible “October surprise.”

NBC’s ratings and profit have declined in recent years as the network has grappled with unpopular program choices and a persistently weak advertising economy. This season NBC has tumbled into third place behind ABC and CBS. Last season the network finished in second place after an unprecedented six-year prime-time winning streak.

Welch’s oft-repeated business philosophy is that GE must be first or a competitive second in each of its operations if the conglomerate is to remain in that business.

Sources stressed that discussions between GE and parties interested in NBC have previously failed. At least two investment banks, Kidder Peabody & Co. and Morgan, Stanley & Co., have made presentations to GE in the last year on possible strategic options for the network.

The Diller-Paramount rivalry for NBC pits two longtime adversaries.

Diller was chairman of Paramount Pictures until a falling out with Paramount Communications Chief Executive Martin Davis.

Diller went on to become chairman of Fox Inc. and the architect behind the studio’s fourth television network. He resigned from Fox last February, saying he wanted to run his own business.

Paramount Pictures is now headed by Brandon Tartikoff, the former NBC programming whiz. Tartikoff, along with former NBC Chairman Grant Tinker, was instrumental in leading NBC out of the ratings basement in the early 1980s and making it the most profitable network in history.

But NBC’s financial picture has grown bleak in recent years.

At the peak of its success a few years ago, NBC generated more than $600 million in operating profit. But last year, pretax profit plunged to $203 million, and the network lost an estimated $70 million.

The most profitable part of NBC is the network’s six owned TV stations, including KNBC-TV in Burbank. Analysts estimate that the stations will collectively earn between $225 million and $250 million this year, although the company’s overall profit will be depressed because of losses associated with the network and NBC’s coverage of the Summer Olympics in Barcelona.