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Disney/FOX Acquisition Thread

So the $71B that Disney paid for FOX is now essentially down to $56B and will go down lower by about $20B once they sell off the RSNs. So in the end, Disney will get FOX for likely somewhere between $35B-$38B once everything is finalized.

So in the end, it's not going to be as bad for Disney as the $71B looks, but i'm sure Disney wishes they could've used the 39% of Sky as leverage but considering the high price they ended up paying for FOX, they decided taking the money at a premium was more worth it to gain back a little bit of what they spent.
 
So what would Sky generate per year for a 100% owner?
Here's a basic analysis for both Disney and Comcast:

Disney is paying about $50 billion ($36 billion stock and $14 billion in debt) after subtracting out $20 billion in RSNs and $15 billion in Sky stake being sold off.


Disney is receiving units (FX/National Geographic/Fox Television+Movie studio/Fox International Channels/Star India) that generate about $13 billion in revenue and $3 billion in EBITDA as well as the 30% of Hulu for that roughly $50 billion in stock and debt.

Fox will keep about $10 billion in revenue and $2.5 billion in EBITDA.

The RSNs which generate about $7 billion in revenue and $2 billion in EBITDA are going to be sold off.



Comcast is paying about $49 billion ($38.8 billion in stock and $10.3 billion in debt) and receiving Sky that generates $17.8 billion in revenue and $3.1 billion in EBITDA.

Sky is 3 units though, and by virtue of British laws (basically forced BT monopoly to allow others to use their connections) that have allowed them to build a large broadband business (6+ million subscribers), Sky UK is the healthiest of its 3 units:


Sky UK: $11.7 billion revenue with $2.5 billion in EBITDA (21% profitability ratio)

Sky Germany/Austria: $2.6 billion revenue with $160 million in EBITDA (6% profitability ratio)

Sky Italy: $3.4 billion revenue with $450 million in EBITDA (13% profitability ratio)


As you can see, Sky UK is very healthy because it's a unified Comcast-like business that can rely on broadband to secure its content businesses. The Italian business is pretty healthy as well. The German/Austrian business is not healthy at all.


This is why my expectations are that Comcast will begin to look hard at purchasing cable units in Germany/Austria and Italy with which to create a more unified content + broadband offering similar to what Sky UK has.

Sky has also gone into Spain/Switzerland with OTT and could possibly look at other countries like Portugal as well in the future.

What company also has cable units in most of those countries? Vodafone: Vodafone owns massive numbers of cable units in Germany, Italy, Spain, and Portugal.

If there is to be a deal to build a European Comcast (like how Comcast bought AT&T Broadband back in 1999-2000), then Comcast will have to make a deal with Vodafone at some point. Those German/Italian operations will need a broadband offering to secure Sky's content offering.
 
Here's a basic analysis for both Disney and Comcast:

Disney is paying about $50 billion ($36 billion stock and $14 billion in debt) after subtracting out $20 billion in RSNs and $15 billion in Sky stake being sold off.


Disney is receiving units (FX/National Geographic/Fox Television+Movie studio/Fox International Channels/Star India) that generate about $13 billion in revenue and $3 billion in EBITDA as well as the 30% of Hulu for that roughly $50 billion in stock and debt.

Fox will keep about $10 billion in revenue and $2.5 billion in EBITDA.

The RSNs which generate about $7 billion in revenue and $2 billion in EBITDA are going to be sold off.



Comcast is paying about $49 billion ($38.8 billion in stock and $10.3 billion in debt) and receiving Sky that generates $17.8 billion in revenue and $3.1 billion in EBITDA.

Sky is 3 units though, and by virtue of British laws (basically forced BT monopoly to allow others to use their connections) that have allowed them to build a large broadband business (6+ million subscribers), Sky UK is the healthiest of its 3 units:


Sky UK: $11.7 billion revenue with $2.5 billion in EBITDA (21% profitability ratio)

Sky Germany/Austria: $2.6 billion revenue with $160 million in EBITDA (6% profitability ratio)

Sky Italy: $3.4 billion revenue with $450 million in EBITDA (13% profitability ratio)


As you can see, Sky UK is very healthy because it's a unified Comcast-like business that can rely on broadband to secure its content businesses. The Italian business is pretty healthy as well. The German/Austrian business is not healthy at all.


This is why my expectations are that Comcast will begin to look hard at purchasing cable units in Germany/Austria and Italy with which to create a more unified content + broadband offering similar to what Sky UK has.

Sky has also gone into Spain/Switzerland with OTT and could possibly look at other countries like Portugal as well in the future.

What company also has cable units in most of those countries? Vodafone: Vodafone owns massive numbers of cable units in Germany, Italy, Spain, and Portugal.

If there is to be a deal to build a European Comcast (like how Comcast bought AT&T Broadband back in 1999-2000), then Comcast will have to make a deal with Vodafone at some point. Those German/Italian operations will need a broadband offering to secure Sky's content offering.
Thank you for the analysis. You have a talent for distilling the numbers so schmucks like me can understand the basics :thumbsup:
 
If there is to be a deal to build a European Comcast (like how Comcast bought AT&T Broadband back in 1999-2000), then Comcast will have to make a deal with Vodafone at some point. Those German/Italian operations will need a broadband offering to secure Sky's content offering.

Aren't LibertyGlobal also trying to get in bed with Vodafone in Europe? I'm sure they were touted as a buyer for Virgin Media at some point.
 
Aren't LibertyGlobal also trying to get in bed with Vodafone in Europe? I'm sure they were touted as a buyer for Virgin Media at some point.
Yep. What happened was that Liberty Global kept its Virgin Media business and part of some smaller countries cable/media businesses but sold its UnityMedia (German cable business) and units for some other smaller countries to Vodafone.

So now Vodafone has cable units across all of Germany if the EU allows the Vodafone-Liberty Global deal to go through. (Vodafone and LG covered different German states but the combination covers all of Germany).


Basically the important thing is that Vodafone isn't getting Virgin Media (which has a big UK cable business), since that would create anti-trust problems with Sky UK.


A couple years from now Vodafone may try to get Virgin Media from Liberty Global.


But that's likely where Comcast will step in and possibly make a huge offer for all of Vodafone's cable businesses... just like we saw with Sky which Comcast took from Fox/Disney.


That's why I expect Comcast to work hard on bringing debt down by $20-25 bn over the next couple of years so that they can target Vodafone or smaller cable operators in Germany/Italy/Austria/Spain etc.

Knowing how aggressive Brian Roberts is, I think he's already thinking about the next move, that's why I think we see a big Comcast-Vodafone deal in a couple years.
 
Yep. What happened was that Liberty Global kept its Virgin Media business and part of some smaller countries cable/media businesses but sold its UnityMedia (German cable business) and units for some other smaller countries to Vodafone.

So now Vodafone has cable units across all of Germany if the EU allows the Vodafone-Liberty Global deal to go through. (Vodafone and LG covered different German states but the combination covers all of Germany).


Basically the important thing is that Vodafone isn't getting Virgin Media (which has a big UK cable business), since that would create anti-trust problems with Sky UK.


A couple years from now Vodafone may try to get Virgin Media from Liberty Global.


But that's likely where Comcast will step in and possibly make a huge offer for all of Vodafone's cable businesses... just like we saw with Sky which Comcast took from Fox/Disney.


That's why I expect Comcast to work hard on bringing debt down by $20-25 bn over the next couple of years so that they can target Vodafone or smaller cable operators in Germany/Italy/Austria/Spain etc.

Knowing how aggressive Brian Roberts is, I think he's already thinking about the next move, that's why I think we see a big Comcast-Vodafone deal in a couple years.
I was a bush league chess player but the thinking leading to the end game of these deals is fascinating.
I guess this is what the titans of industry thrive on.
Do you think Comcast was serious about 21CF or just pushing the price?
 
I was a bush league chess player but the thinking leading to the end game of these deals is fascinating.
I guess this is what the titans of industry thrive on.
Do you think Comcast was serious about 21CF or just pushing the price?
It really depends on whether I'm right in guessing that Robert's strategy is to build Sky into a European Comcast, but I think that makes more sense than paying $60-70 billion for Fox's other assets.


I think Comcast was sort of playing chess with Disney to shake Sky loose.

Under the original all-stock offer, Disney was only just taking $14 billion in debt and could have easily bid Sky up to $40+ billion without folding.

But once Disney committed to a half-cash offer, that really opened up Comcast to push for Sky.


The most valuable assets of Fox that Comcast really wanted were Star India (the biggest broadcaster in India with a huge OTT in Hotstar) and the 30% of Hulu. The rest of the assets are nice but not really necessary for Comcast.


But if you're Brian Roberts would you rather spend a huge sum of money on Fox's TV/movie/channels or put that capital towards buying up European cable assets?

For me, I'd take the European cable assets easily.

I'd rather spend $50 billion over the next 5-10 years building up a set of cable assets across Germany/Austria, Italy, Spain, and maybe even acquire more in the UK. Then bundle Sky OTT with those millions of subscribers.

Time will tell, but that looks like a much better strategy than battling Amazon Prime/Netflix/Disney in content wars.

Build a huge cable base across US/EU and use that to drive OTT services.
 
In regards to DP2, this is...a slippery slope.

On one, it'll be interesting to see how it's marketed, and two; this seemed..to of been teased with the Target release of the Super cut of DP2. I don't think it'll automatically push the franchise to PG13, but if it's successful; I'd wonder if Disney and Ryan may come to figure out something that could do both PG13 & R versions.

But if not, this is going to get panned real quick, as it'd be pandering.
 
Disney CEO Bob Iger promises that he might keep the R-rated version of Deadpool. It would be suicide if the House of Mouse canceled the R-rated Deadpool series and move it being PG-13 exclusive. Deadpool is already renowned for dirty jokes and bad language, so having him being moved into PG-13 via downplayed dirty jokes in favor of MCU-style would be completely out of place.
 
The disneyfying of Fox Marvel properties is starting, they pushed back Alita Battle Angel to release a PG-13 Cut of Deadpool 2.

This re-release has nothing to do with Disney. It was planned a while back and they even shot additional footage exclusively for it.

The whole film is framed with Deadpool reading the story of DP2 to Fred Savage as he’s trying to go to sleep (like in Princess Bride).

Ryan tweeted this photo of it out yesterday.

3722DA46-0F34-458D-AABC-5318E4F60D95.jpeg
 


It may also apparently seem that they may be able to finalize and lock the accquisition as early as the end of the year, or in early 2019.

New Fox Promotes Five Top Executives Ahead Of Disney Deal Close | Deadline


Ironically deadline put out another article showing how problems are forming because the Fox execs are making 20% more than all the Disney execs in similar positions.

Once the deal closes, then Fox loses its biggest content generator....Harper Collins which is where they have pulled a good number of their film IPs from by having common ownership.
 
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