Disney/FOX Acquisition Thread

[Jon84]

Sky already has a good relationship with Disney, delivering their content via dish and OTT. Be interesting to see how that changes if Comcast takeover

 

[Paulio]

It effects whether Disney can justify the price of their purchase because the assumption was FOX was going to fully purchase Sky before the deal closed. Essentially Comcast just devalued Fox after a purchase agreement was made by Disney.

I mean, I care about Comcast's relations with Disney and FOX. I highly suspect that Comcast would use the Sky plc (which Disney also pursue after Murdoch got rejected) to indirectly force Murdoch into the negotiating table regarding taking over 21st Century Fox from Disney.

 

[quinnmac000]

I mean, I care about Comcast's relations with Disney and FOX. I highly suspect that Comcast would use the Sky plc (which Disney also pursue after Murdoch got rejected) to indirectly force Murdoch into the negotiating table regarding taking over 21st Century Fox from Disney.

I think this is to inconvenience Fox and to deter Disney. Fox already is having issues with getting Sky due to past transgressions and unethical activities while Disney would have to put in another bid on top of the purchase of Fox making the buyout that was once only 52 billion now almost cost 80 billion as Fox as said they won't spend anymore money. Best way to stop a deal from going through is to complicate the pieces.

 

[zg44]

It's win-win for Comcast. Either Comcast gets Sky or Disney has to pay billions more indirectly for Sky. That's an automatic win-win.

Sky is the most expensive part of the Fox purchase because Sky is being purchased for cash while Fox's shares are being exchanged for Disney (or Comcast if they successfully outbid) shares.


Fox is transferring $13.7 billion in debt to Disney as part of the sale of assets, but if Fox takes over Sky by paying cash, then the extra $10-12 billion that they raise in debt to get cash for Sky shares and Sky's own $11.5 billion in debt will be transferred to Disney as an additional $21.5-23.5 billion in debt.

So that means that Disney's debt will go up by $35.2-37.2 billion.

So if Fox has to raise its bid by say 20-30% to outbid Comcast then that's likely to end up as another $4-6 billion that would be raised in debt that would go to Disney. So Disney's debt would end up going up by $39.2-42.2 billion instead.


Comcast's bid values Sky at $31 billion in cash (most of which would be raised through debt) along with Sky's $11.5 billion in debt would result in Comcast's debt going up by around $35-37 billion (excluding around $5-7 billion in cash on hand used in the purchase).

Basically, Comcast may have just forced Disney to spend an extra $4-6 billion on Sky or give it up to Comcast.

 

[Paulio]

Warner Bros. & DC Entertainment Could Be Sold If AT&T Merger Fails

If the AT&T merger fails, Time Warner will likely be broken up into parts and sold separately as Warner Bros., HBO and Turner, leaving the fate of DC Comics up in the air. It also will likely force Comcast to back off rebidding for Fox and focus on trying to get DC Comics if they wish, but at the same time, it would leave Marvel Super Hero Island at IOA much more worthless, if Comcast actually succeed to acquire DC Comics.

 

[AlexanderMBush]

Warner Bros. & DC Entertainment Could Be Sold If AT&T Merger Fails

If the AT&T merger fails, Time Warner will likely be broken up into parts and sold separately as Warner Bros., HBO and Turner, leaving the fate of DC Comics up in the air. It also will likely force Comcast to back off rebidding for Fox and focus on trying to get DC Comics if they wish, but at the same time, it would leave Marvel Super Hero Island at IOA much more worthless, if Comcast actually succeed to acquire DC Comics.

If it happens, which seems more plausible, I hope to God Universal strikes a deal for Potter, DC, Cartoon Network, and New Line, as that'd bring a heluvalot of material for Universal to work with.

 

[GadgetGuru]

Warner Bros. & DC Entertainment Could Be Sold If AT&T Merger Fails

If the AT&T merger fails, Time Warner will likely be broken up into parts and sold separately as Warner Bros., HBO and Turner, leaving the fate of DC Comics up in the air. It also will likely force Comcast to back off rebidding for Fox and focus on trying to get DC Comics if they wish, but at the same time, it would leave Marvel Super Hero Island at IOA much more worthless, if Comcast actually succeed to acquire DC Comics.

I honestly don't think Comcast or Universal would be allowed to buy any of those companies if AT&T isn't.

AT&T is in a completely different business than Time Warner, yet there's antitrust concerns. WB is a bigger studio than Fox and this would happen post Disney/Fox merger. I just can't buy the idea that a anti ATT/Time Warner DOJ would allow WB to merge with Comcast or Disney.

Then again, the idea of the number of major studios being cut in half terrifies me.

 

[quinnmac000]

I honestly don't think Comcast or Universal would be allowed to buy any of those companies if AT&T isn't.

AT&T is in a completely different business than Time Warner, yet there's antitrust concerns. WB is a bigger studio than Fox and this would happen post Disney/Fox merger. I just can't buy the idea that a anti ATT/Time Warner DOJ would allow WB to merge with Comcast or Disney.

Then again, the idea of the number of major studios being cut in half terrifies me.

AT&T issue isn't because the difference of businesses...its two large companies merging especially one that controls distribution. Purchasing piecemeals of a company, create less of a power grab of a company than buying a full company.

 

[Paulio]

If it happens, which seems more plausible, I hope to God Universal strikes a deal for Potter, DC, Cartoon Network, and New Line, as that'd bring a heluvalot of material for Universal to work with.

Warner Bros. isn't going to let these franchises go to its rivals. Due to the merger and acquisitions circumstances, WB isn't simply going to allow that to happen. They're gonna clutch to whatever they have.

I honestly don't think Comcast or Universal would be allowed to buy any of those companies if AT&T isn't.

AT&T is in a completely different business than Time Warner, yet there's antitrust concerns. WB is a bigger studio than Fox and this would happen post Disney/Fox merger. I just can't buy the idea that an anti ATT/Time Warner DOJ would allow WB to merge with Comcast or Disney.

Then again, the idea of the number of major studios being cut in half terrifies me.

I’d imagine that a certain president’s hatred for CNN as well as benefiting former Verizon lawyer Ajit Pai probably has something to do with it. I don’t even care about this merger, but if the alternative is to have yet another studio buyout, I’d rather that it does happen. If Universal was allowed to merge with Comcast, there’s no reason Time Warner shouldn’t be allowed to merge with AT&T.

 

[quinnmac000]

I do find it interesting how business analysts are pushing the comcast stock down as they see a potential takeover of sky bad for universal with the reasoning that satellite is obsolete therefore bad for Comcast as they won't be able to deal with the issues to fix it but somehow magically Disney can?

 

[Jon84]

I do find it interesting how business analysts are pushing the comcast stock down as they see a potential takeover of sky bad for universal with the reasoning that satellite is obsolete therefore bad for Comcast as they won't be able to deal with the issues to fix it but somehow magically Disney can?

Sky is moving OTT this year, they can force customers with old equipment to upgrade easily. So that makes no sense!

 

[quinnmac000]

The Comcast Sky is moving forward as they already applied for phase 1 EU regulatory approval. They should get an answer at the end of March on if there is any anti-trust concerns. If nothing comes up in their investigation they would be ahead of Fox whose on regulatory investigation does not end until June.

Fox, a company that has consistently begged for less government intervention in business has shockingly asked the government and regulatory boards to investigate Comcast as throughly as they are being investigated because its not fair. However analyst have noticed that Comcast does not control any newspaper and NBC News Europe is a very small niche compared to the Murdochs power in the UK. Most analysts are changing their tune and stating this deal is now good for Comcast and expect them to win the bidding war.

Comcast and Murdoch's Fox in regulatory race for Sky approval | Reuters

 

[zg44]

There are a lot of possible wrinkles from here:

If Comcast gets 51% of Sky (let's just say 51% of the 61% non-Fox owned shares are sold to Comcast in their tender offer), then we could see a situation where Disney and Comcast trade with each other after the Disney-Fox sale:

Comcast could hold 51% of Sky and 30% of Hulu, while Disney owns 60% of Hulu and 39% of Sky.

It makes sense for some kind of trade where Comcast sells its 30% of Hulu to Disney (plus around $5-7 billion in cash) in exchange for Disney's 39% of Sky.

Then you end up with Comcast owning 90% of Sky while Disney owns 90% of Hulu. That's a reasonable outcome that would probably be a win-win for both Comcast and Disney.

 

[quinnmac000]

There are a lot of possible wrinkles from here:

If Comcast gets 51% of Sky (let's just say 51% of the 61% non-Fox owned shares are sold to Comcast in their tender offer), then we could see a situation where Disney and Comcast trade with each other after the Disney-Fox sale:

Comcast could hold 51% of Sky and 30% of Hulu, while Disney owns 60% of Hulu and 39% of Sky.

It makes sense for some kind of trade where Comcast sells its 30% of Hulu to Disney (plus around $5-7 billion in cash) in exchange for Disney's 39% of Sky.

Then you end up with Comcast owning 90% of Sky while Disney owns 90% of Hulu. That's a reasonable outcome that would probably be a win-win for both Comcast and Disney.

Hulu is soon going to die off. Thanks to Amazon, Netflix, CBS streaming service, Viacom's new streaming service, and Disney's new streaming service. The library keeps getting thinner as other companies get exclusive streaming rights to shows such as Netflix with most CW shows and Amazon with Universal Cable shows. That would decrease the power of Hulu down to essentially current NBC properties, Fox properties, old WB properties as they also have netflix streaming deals, and select ABC properties that didn't fall under the family realm.

Essentially the studios that bought into Hulu, effectively are destroying it due to consumers demands.

 

[zg44]

Hulu is soon going to die off. Thanks to Amazon, Netflix, CBS streaming service, Viacom's new streaming service, and Disney's new streaming service. The library keeps getting thinner as other companies get exclusive streaming rights to shows such as Netflix with most CW shows and Amazon with Universal Cable shows. That would decrease the power of Hulu down to essentially current NBC properties, Fox properties, old WB properties as they also have netflix streaming deals, and select ABC properties that didn't fall under the family realm.

Essentially the studios that bought into Hulu, effectively are destroying it due to consumers demands.

It's possible, but Hulu's built up a decent following (17 million subs or so), and Disney's plan is to make Hulu the home of all their "adult stuff" like FX shows as well as Fox Searchlight movies and the like. Along with ABC shows and originals from studios such as MGM or Sony like Handmaid's Tale, that should be enough to sustain a decent subscription service.

I do think Disney (or Comcast) would want to invest heavily in Hulu and maybe take it international to go head-to-head with Netflix around the world.

 

[quinnmac000]

It's possible, but Hulu's built up a decent following (17 million subs or so), and Disney's plan is to make Hulu the home of all their "adult stuff" like FX shows as well as Fox Searchlight movies and the like. Along with ABC shows and originals from studios such as MGM or Sony like Handmaid's Tale, that should be enough to sustain a decent subscription service.

I do think Disney (or Comcast) would want to invest heavily in Hulu and maybe take it international to go head-to-head with Netflix around the world.

The only other place Hulu is available is Japan and pretty much all the other studios went to Netflix for their distribution in Japan. So even internationally its a huge loss unless they get TV Tokyo, Fuji TV, or Nippon TV to back it.

In addition, most if not all Networks cable and public access channels in East Asia have free live streaming and free live playback. Why would anyone pay for Hulu what they can watch for free.

 

[quinnmac000]

The SEC has approved Comcast going forth and buying up Sky Shares
https://www.sec.gov/divisions/corpf...cast-corporation-offer-for-sky-plc-031218.pdf

Comcast also released its official statement
Comcast’s Proposal for Sky | Comcast Corporation

 

[Paulio]

AT&T heads to trial in landmark merger fight | TheHill

Just to let everyone know, the AT&T-TW trial is tomorrow which might last up to six to 8 weeks (almost two months). So if this trial is successful for AT&T, Comcast might try and put a dent in the Disney/Fox deal, hoping such move would force Murdoch to deal with Comcast instead of Disney. Not likely gonna happen, but the stakes are in high in this, not just for AT&T and our government, but for other mega-mergers as well.

 

[quinnmac000]

AT&T heads to trial in landmark merger fight | TheHill

Just to let everyone know, the AT&T-TW trial is tomorrow which might last up to six to 8 weeks (almost two months). So if this trial is successful for AT&T, Comcast might try and put a dent in the Disney/Fox deal, hoping such move would force Murdoch to deal with Comcast instead of Disney. Not likely gonna happen, but the stakes are in high in this, not just for AT&T and our government, but for other mega-mergers as well.

Sony is hedging selling based on this deal as well. Comcast with Sky and getting Sony at a low discount rate >>>> than buy Fox at overvalued rate with Sky not subtracted.

 

[zg44]

MGM just forced out their CEO over disagreements over the company's future. It will be worth watching to see if MGM ends up on the selling block.

A lot of rumors that the now former CEO wanted to keep MGM independent, but the hedge funds that own it want to sell while there's a lot of merger activity, so they can get a fat payoff.