Disney/FOX Acquisition Thread

[quinnmac000]

Universal is going downhill.

To quell this notion:

Per Box Office: Universal actually has the high grossing animation department with Dreamworks surpassing Pixar and Illumination surpassing Disney Animation Studios. Blumhouse also makes Universal a buttload of money...They aren't worried.
Source: Movie Franchises and Brands Index

Television: Comcast had 4 of the most watched Television networks (NBC, MSNBC, USA, Telemundo) with 3 in the Top 10 per total viewers and then within the demo of 18-49 which are what makes studios the most money, they also had 4 channels (NBC, Telemundo, USA, Bravo) with 3 in the Top 10. The only channel that is having trouble currently is Universal Kids which say a -30% downward trend in viewership.
Source: Nielsen Via IndieWire
Highest Network Ratings of 2017: Most Watched Winners & Losers | IndieWire
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Going back to the Disney/Fox Merger:

It seems DOJ is getting harsher on mergers. There are rumours that the DOJ may extend conditions for Comcast/Universal deals as well as analysts are now starting to state that Disney may have to give up RSN and the film studio in the FOX deal for the deal to go through.
Which Media M&A Dance Partners Will Hook Up In 2018? | Deadline

 

[Nick]

To quell this notion:

Per Box Office: Universal actually has the high grossing animation department with Dreamworks surpassing Pixar and Illumination surpassing Disney Animation Studios.

Sorry, but just pure box office numbers doesn't mean it is the top studio.

The numbers you're using to justify DreamWorks "passing" Pixar is Total Box Office, which for DW is $5.4B.... on 34 movies, averaging out to $155.4M per movie. Pixar has $4.8B on just 17 movies, which comes to $254M per movie.

Actually, going by "average per movie", neither Dreamworks OR Pixar would be the top animation studio. That would be Illumination. They've grossed $2.1B on just 8 movies, which comes to $272.6M per movie. Pixar is number 2 with Marvel at 3 ($211.4M), LucasFilm at 4 ($209.9M) and Walt Disney Animation at 5 ($194.7M).

DreamWorks doesn't show up on the list from the source you cited until 8th going by average, just behind DC Comics and just ahead of Warner Animation.

 

[quinnmac000]

With Disney deal looming, Murdoch’s empire is fractured

A very telling tale of how this deal came to be.

 

[Paulio]

I'm confused, what's gonna happen to the Fox Broadcasting Company (FOX)? Sorry I miss the whole thing last month, but I'm a bit strayed from this since. FOX network would lose most of the TV entertainment shows over to the rival competitor and now they have little to no shows left.

 

[AlexanderMBush]

I'm confused, what's gonna happen to the Fox Broadcasting Company (FOX)? Sorry I miss the whole thing last month, but I'm a bit strayed from this since. FOX network would lose most of the TV entertainment shows over to the rival competitor and now they have little to no shows left.

I believe it's been said that FOX and some elements of Fox Sports will convert to New Fox.

 

[zg44]

I'm confused, what's gonna happen to the Fox Broadcasting Company (FOX)? Sorry I miss the whole thing last month, but I'm a bit strayed from this since. FOX network would lose most of the TV entertainment shows over to the rival competitor and now they have little to no shows left.

FOX broadcast will basically switch from primarily scripted to non-scripted + sports mainly. Right now they have around 15+ scripted shows that are produced at Fox television studio annually, but that number will decline dramatically.

That will basically disconnect the Fox television studio from Fox broadcast channel as the ownership of Fox television studio goes to Disney.

 

[Paulio]

Universal has a lot up their sleeve. With how huge Universal is going, it takes years to get all their ducks in a row.

Excluding the Illumination and DWA films, Universal franchises isn't as interesting as Warner Bros. and Disney itself. Jurassic World isn't going to be around much longer after Fallen Kingdom II and many people began doubting the fate of the franchise. The Fate of the Furious last year, while it grossed over $1.236 billion, didn't do so well in the U.S. box office market (grossing over $225.8 million against a $250 million budget). The last Jason Bourne two years ago did fairly well but it isn't a success and isn't iconic enough nor interesting enough to make a compelling Universal Studios attraction (which many suspect it would be T2 replacement). There's a bunch of rumors going around that because certain parts of franchises aren't popular with American audiences, they are intentionally made for foreign audiences. Universal is gonna need to toughen up if they really need to compete thoroughly as a whole.

 

[Parkscope Joe]

Excluding the Illumination and DWA films, Universal franchises isn't as interesting as Warner Bros. and Disney itself. Jurassic World isn't going to be around much longer after Fallen Kingdom II and many people began doubting the fate of the franchise. The Fate of the Furious last year, while it grossed over $1.236 billion, didn't do so well in the U.S. box office market (grossing over $225.8 million against a $250 million budget). The last Jason Bourne two years ago did fairly well but it isn't a success and isn't iconic enough nor interesting enough to make a compelling Universal Studios attraction (which many suspect it would be T2 replacement). There's a bunch of rumors going around that because certain parts of franchises aren't popular with American audiences, they are intentionally made for foreign audiences. Universal is gonna need to toughen up if they really need to compete thoroughly as a whole.

Lets not play the "excluding" game. Same thing can be said how well is Disney doing excluding Pixar, Marvel, and Star Wars...

 

[zg44]

Trump delay of AT&T-Time Warner approval has stalled big media plans
"If AT&T is allowed to buy Time Warner, Comcast may try to top Disney's bid for Fox, according to people familiar with the matter."

Important note in this CNBC article; the author likely has a tip on this from inside Comcast's exec offices given the parent company relationship there.

So Comcast may really just be waiting to see if the AT&T-TW merger goes through to really make a push for Fox's assets. Comcast tried to bid above Disney before but the regulatory uncertainty was one problem there which helped Disney get Fox's assets at a lower price. If AT&T-TW goes through, that would remove the uncertainty about vertical mergers in the media space. I'd imagine the DoJ wouldn't try to stop a Comcast bid for the Fox assets if it failed to stop AT&T-TW.

 

[Paulio]

Trump delay of AT&T-Time Warner approval has stalled big media plans
"If AT&T is allowed to buy Time Warner, Comcast may try to top Disney's bid for Fox, according to people familiar with the matter."

Important note in this CNBC article; the author likely has a tip on this from inside Comcast's exec offices given the parent company relationship there.

So Comcast may really just be waiting to see if the AT&T-TW merger goes through to really make a push for Fox's assets. Comcast tried to bid above Disney before but the regulatory uncertainty was one problem there which helped Disney get Fox's assets at a lower price. If AT&T-TW goes through, that would remove the uncertainty about vertical mergers in the media space. I'd imagine the DoJ wouldn't try to stop a Comcast bid for the Fox assets if it failed to stop AT&T-TW.

I hate to say this, but it doesn't really seem likely a scenario. Only if that pressure was relieved, would Comcast try this... but I think the bidding stage is over anyway, and they'd be a bit late by the time the deal gets through the Justice Department. It seems like a last-resort thing.

 

[quinnmac000]

I hate to say this, but it doesn't really seem likely a scenario. Only if that pressure was relieved, would Comcast try this... but I think the bidding stage is over anyway, and they'd be a bit late by the time the deal gets through the Justice Department. It seems like a last-resort thing.

Deal isn't finalized until money transfers from Disney to Murdoch.

 

[zg44]

I hate to say this, but it doesn't really seem likely a scenario. Only if that pressure was relieved, would Comcast try this... but I think the bidding stage is over anyway, and they'd be a bit late by the time the deal gets through the Justice Department. It seems like a last-resort thing.

Timing wise: AT&T-TW lawsuit will be decided by early May.

Disney/Fox would probably get anti-trust clearance around October-December at the earliest.

That would give Comcast around 4-6 months to try to outbid Disney assuming the DoJ loses their lawsuit against AT&T-TW.

 

[quinnmac000]

Timing wise: AT&T-TW lawsuit will be decided by early May.

Disney/Fox would probably get anti-trust clearance around October-December at the earliest.

That would give Comcast around 4-6 months to try to outbid Disney assuming the DoJ loses their lawsuit against AT&T-TW.

More so I think we may see Comcast just buy out Sony film and television units that seem to be more so willing to sell now if AT-&T-TW is allowed. It would fit way more with what they are trying to do in Asia/Japan than Fox.

 

[AlexanderMBush]

More so I think we may see Comcast just buy out Sony film and television units that seem to be more so willing to sell now if AT-&T-TW is allowed. It would fit way more with what they are trying to do in Asia/Japan than Fox.

Yeah, if anyone's going to get bought by Comcast right now, it's Sony Film/Television.

It seems to be the speculation right now following the upcoming appointment of Yoshida, and that while I think that there'll be a separate deal for Disney, I do think that the most likely client overall would be Comcast/NBCUNIVERSAL.

 

[quinnmac000]

Yeah, if anyone's going to get bought by Comcast right now, it's Sony Film/Television.

It seems to be the speculation right now following the upcoming appointment of Yoshida, and that while I think that there'll be a separate deal for Disney, I do think that the most likely client overall would be Comcast/NBCUNIVERSAL.

Disney won't be able to buy Sony if they buy Fox (there is a clause in the current contract if either them cancel or the deal doesn't clear DOJ, they owe the other a set amount of money). That would put them over the 50% in television so they would have to divest some television studios stateside and potentially film wise as well. They would have to choose one or the other they can't necessarily have both without being forced to divest nor does Sony have anything that would enhance or create synergy with other divisions within Disney. Fox provides Disney two things (Sky and Hulu) which is somewhat essential to them growing as a company in a time where they lack a distribution method compared to TW if the AT&T deal goes through and Comcast Cable with Universal and a streaming network.

Comcast on the other hand would be more so benefited if they buy out Sony Film/Television and manage to get them to include SME (Sony Music Entertainment which actually owns quite a few IPs [~600 IPs to include Naruto, Bleach, Gintama] in the quantity compared to Fox. Essentially Universal would add over....get ready for it at minimum over 2,000 IPs solely in television not to including film/random obscure characters they own. While some of them are not well known, popular, etc, in a reboot time, thats a lot of stuff to potentially use. To compare, Fox actually owns ~600 IPs.

They could easily add SME, Aniplex, Funimation and restructure it into NUEJ (NBCUniversal Entertainment Japan) and exploit IPs and musical artists for USJ and East Asia. Sony already has a strong network in Asia of networks for their programming which pretty much rivals Fox and what they have with Star in India. Crackle and Funimation are already strong independent streaming. So they already have quite a bit covered in the television area. The issue will be do they keep Sony Pictures Television as a independent producer or fold it into Universal television.

The film side is where issues are present. Unlike Fox which is fewer studios, Sony has a robust set of film companies that already overlap with Universal. Do they combined Universal and Columbia Pictures? Does Sony Animation fold into Dreamworks or Illuminations or keep it a standalone? I'm sure they would give Screen Gems to Blumhouse as a way to keep them in the family. Sony Picture Classics joins Focus. Fox also has a stronger film catalog compared to Sony especially in prestige films.

So either way, if Disney gets Fox and Comcast gets Sony both have their wins and losses. But with the jobs Comcast/NBCU seems to be opening and advertising, Sony seems to go way more in line with that they want than Fox and either way, the deals will benefit in providing something both desperately need.

 

[zg44]

Sony Pictures would be a much cheaper purchase than Fox's assets, but you wouldn't get similar European assets or American assets, here's a quick comparison with valuations:

Sony TV/Movie studio (includes Sony Animation, Imageworks, Columbia/TriStar, ScreenGems, Funimation etc.) = $12 billion
Sony Global TV Networks (global distribution division including a strong Indian presence) = $10 billion
Overall value of Sony Pictures = $22 billion (minus assumption of $3 billion in debt gives a real value of around $19 billion)

Fox TV/Movie studio (includes Blue Sky Animation, Fox Animation, Fox 2000, Fox Searchlight, etc.) = $15 billion
Fox's International (non-US) TV Networks (non-US distribution division overseas including 30% of Sky and Star India) = $15 billion
FX/National Geographic = $9 billion
Fox Regional Sports Networks = $20 billion
30% of Hulu = $7 billion
Overall value of Fox assets = $66 billion (minus assumption of $13 billion in debt gives real value of $53 billion that Disney is paying)

On a revenue comparison, Sony Pictures has around $8 billion in revenue, while Fox's assets generate around $18 billion in revenue.


If Comcast decides to go for Sony Pictures, Comcast would need to make further purchases like MGM Studios (TV studio + some film rights like Bond + Epix premium cable channel) and ITV (UK-based TV studio with European distribution) in order to really create a similar set of new assets comparable to the Fox assets.

MGM (TV studio with film library and rights like Bond + Epix) = $5 billion
ITV (UK-based TV studio with European distribution) = $9 billion
Overall value of Sony Pictures + MGM + ITV = $36 billion (probably around $7 billion in assumed debt)

Sony Pictures + MGM Studios + ITV combined is probably somewhat similar to the Fox assets overall and would involve no real anti-trust problems.

On a revenue comparison, Sony Pictures + MGM + ITV generate a combined $14 billion in revenue.

 

[Paulio]

Given the assets between Sony and Fox, Sony's key assets don't seem very valuable from the entire business standpoint of view if Comcast goes through buying Sony Entertainment. Also, MGM doesn't have a lot of interesting IPs (aside from James Bond, which is a foreign property rather than American) and isn't interested in selling itself to Comcast, so it just makes the purchase of Sony's key assets look terrible from a business and financial strategic point of view, and further purchases of other companies would take a long more time and scrutiny with anti-trust regulators and shareholders who have different views of how the operation should proceed. Disney bought Marvel in order to appeal to the boys and men and to sell a bunch of toys, Disney bought Lucasfilm because of its long-term relationship with former creative consultant George Lucas and it already has a Star Wars attraction in its parks, and Comcast bought DreamWorks Animation because of its relations (since DWA is headquartered in the same backlot as Universal Studios) with the company and to expand its animation empire to catch up with Disney. All three assets provide strategic value to both companies, with the House of Mouse growing into a powerhouse thanks to the strong popularity of Marvel and Lucasfilm.

Sony has dozen of popular IPs like Spider-Man, Jump Street, MiB, and Ghostbusters, but doesn't own any popular cable networks (e.g., Disney's Freeform, Fox's FX, Time Warner's TNT, Paramount's Comedy Central, and Comcast's USA Network), doesn't own a sports network, doesn't have a news network, and doesn't own a percentage of Hulu. From Comcast's perspective, even if they want to expand its presence in Asia, Sony's Hollywood side won't benefit them in the long run, except losing tons of money from this their future acquisitions would be affected. Not worth the risk.

Comcast's only chance is that should the AT&T-TW merger be approved, they might gun to outbid Disney for Fox, as it would provide strategic value to the company, like Marvel and Lucasfilm have for Disney.

 

[quinnmac000]

Given the assets between Sony and Fox, Sony's key assets don't seem very valuable from the entire business standpoint of view if Comcast goes through buying Sony Entertainment. Also, MGM doesn't have a lot of interesting IPs (aside from James Bond, which is a foreign property rather than American) and isn't interested in selling itself to Comcast, so it just makes the purchase of Sony's key assets look terrible from a business and financial strategic point of view, and further purchases of other companies would take a long more time and scrutiny with anti-trust regulators and shareholders who have different views of how the operation should proceed. Disney bought Marvel in order to appeal to the boys and men and to sell a bunch of toys, Disney bought Lucasfilm because of its long-term relationship with former creative consultant George Lucas and it already has a Star Wars attraction in its parks, and Comcast bought DreamWorks Animation because of its relations (since DWA is headquartered in the same backlot as Universal Studios) with the company and to expand its animation empire to catch up with Disney. All three assets provide strategic value to both companies, with the House of Mouse growing into a powerhouse thanks to the strong popularity of Marvel and Lucasfilm.

Sony has dozen of popular IPs like Spider-Man, Jump Street, MiB, and Ghostbusters, but doesn't own any popular cable networks (e.g., Disney's Freeform, Fox's FX, Time Warner's TNT, Paramount's Comedy Central, and Comcast's USA Network), doesn't own a sports network, doesn't have a news network, and doesn't own a percentage of Hulu. From Comcast's perspective, even if they want to expand its presence in Asia, Sony's Hollywood side won't benefit them in the long run, except losing tons of money from this their future acquisitions would be affected. Not worth the risk.

Comcast's only chance is that should the AT&T-TW merger be approved, they might gun to outbid Disney for Fox, as it would provide strategic value to the company, like Marvel and Lucasfilm have for Disney.

You do know Comcast used to own MGM right? (Shared ownership with Sony and a few other partners). I do agree its a weak studio at the same time, it has classic films and prestige films that Universal can exploit (Wizard of Oz, etc). It also is stronger than all the minor majors.

Comcast doesn't need FX because USA already gets higher ratings in both total viewers and in the demo. Comcast also wouldn't be allowed another sports or news company due to anti-trust laws. The only big benefit Fox has stateside is Hulu and outside of FF all the other Marvel products will go to Disney leaving only Terminator, Avatar, Planet of the Apes, and the Fox Searchlight as the only beneficial stateside portions of the deal. Sky is a loss because you aren't even getting the full company because the UK won't let Fox buy out the other part due to their history of illegal activity.

Sony is extremely strong in Asia. You keep looking at film but even then its not like Fox films is that strong internationally (Universal actually is the strongest brand when it comes to international box office) but its their television and their international television networks that make bank especially in Korea, India and the Southeast Asian countries (all places where Universal has television operations but is rather on the weak end). Television spreads a companies influence way better than film as its an continuous operation compared to film when is one and done (part of the reason why Viacom products are so popular in China due to Nickelodeon etc and why Disney spent over 10 years trying to get Disney Channel China and finally getting one last year).

The strategic value is it enhances their operations in places they are currently weak while increasing their content library. Sony also won't cost anywhere as close to Fox which also makes it beneficial.

 

[zg44]

It's important to keep in mind that the biggest aspect of deals for Fox or Sony or MGM would be the tv and global distribution side of the deal, not the film side.

Of the Fox assets, around $6 billion in value is film-related (out of $66 billion).

Of Sony's assets, around $5 billion in value is film-related (out of $22 billion).

Of MGM's assets, around $1 billion in value is film-related (out of $5 billion).

ITV has no major film assets.

So these types of transactions are really not about the movie business; they're much more about the global tv and distribution business. That's where the big money is in this equation. It's about scripted/non-scripted tv shows that bring in $$$ from global/local syndication. The movie franchises are more discussed, but they're not anywhere near the "central" parts of these deals.

These kinds of mergers are being discussed much more because of the impact of Netflix/Amazon Prime/Hulu on the global paytv/cable business than because of changes in the movie business.

 

[deathcab4cutie]

for those worried about deadpool