Disney/FOX Acquisition Thread

[jseal777]

It would put Universal back to producing CBMs since 2008 when it distributed the 2008 movie The Incredible Hulk with Edward Norton as Bruce Banner. It would transfer the Simpsons at Universal theme parks from being a Fox property to being a Universal property instead. You will have NBC TV commercial tunes with some Fox characters in commercials/advertisements. Plus, some of the Fox assets can be very useful for Universal parks, especially the upcomign 3rd theme park in Orlando. Among other things.



Hardly a done deal, the Disney/Fox deal still needs to be cleared through by regulators, not just here in the U.S., but also regulatory bodies around the world. It takes regularly about 11 to 18 months after the deal was announced. Right now, it's almost 5 months into May, so that leaves us maybe 7 to 14 more months for Disney/Fox deal to be approved (or not). Countries around the world approved the AT&T-TW deal, and this country is the only chance of being approved fully, after the DOJ blocked the deal.



Exactly, and there's a problem Disney wants Sky in order to increase its reach internationally, as they describe Sky as the most important asset of FOX. The fact that Fox were already trying to purchase the part of Sky that they didn't own sweetened the deal. With Sky out of the question, Disney may want to renegotiate for a lower price.

Ah I see. Thanks! Personally I hope it’s blocked not just because I would rather Uni have the properties but because I believe Disney is simply becoming too big. I mean absolute monopoly territory’s.

 

[quinnmac000]

Plot twist and possible spoiler...

TCI Builds Up Fox Stake As Disney & Comcast Play Global Tug Of War | Deadline

 

[zg44]

Outside investors at Fox getting involved is one of the key pieces that Comcast would need to succeed in any hostile offer for those assets.

The reality is that the Murdochs do have effective control over Fox due to their supervoting shares, but their economic stake is actually not that large. They won't be able to complete the Disney transaction without the support of the other shareholders.

So if the other investors in Fox start calling for a higher price for all of the assets, then that would be the best trigger for a bidding war between Comcast and Fox.

The first step though is for the AT&T-TimeWarner merger to be accepted by the judge over the next few weeks. After that, there won't be regulatory issues and Comcast can make a strong bid with the support of other Fox shareholders.

 

[Galaxy Defender]

Plot twist and possible spoiler...

TCI Builds Up Fox Stake As Disney & Comcast Play Global Tug Of War | Deadline

This is getting interesting. Definitely worth following.

 

[zg44]

Also, I think one of the things concerning other investors is that the valuations for the assets was very favorable to Disney. For example Hulu's valuation is only around $9 billion (with Fox's 30% valued at $2.7 billion) in the Disney-Fox transaction.

But with 20 million US subscribers and the potential to go international at some point; Hulu's valuation should be at least around $20 billion. As a simple example: Netflix with 125 million subscribers worldwide is valued at $135 billion.

That's at least $1 billion in value for every 1 million subscribers, which shows you how favorable the Disney-Fox transaction is to Disney. That means Disney is getting the 30% of Hulu from Fox at a 55% discount.

Disney is getting a steep discount on some of those assets (the Hulu and Sky stakes especially). That means if outside investors get involved, the whole ballgame can change.

Murdochs control around 300 million out of the 1.8 billion shares in Fox. Nowhere near enough to get the vote through without investor support.

 

[zg44]

AT&T-TimeWarner merger case final arguments were held.

Basically, the judge seems to be leaning heavily towards allowing that merger to go through.

That means, that Comcast's pursuit of Fox's assets may heat up again soon. I'd assume that the Murdochs are waiting for that before they take a next step on Sky or the sale to Disney.

 

[Paulio]

AT&T-DOJ Judge Says He’ll Deliver Verdict June 12 | Deadline

The verdict will be decided on June 12, not until the next month.

 

[zg44]

Another interesting note: DWA decided to change from Netflix to Hulu when their deal is up in 2020 for movies/tv shows streaming:
DreamWorks Animation Sets New Streaming Deal With Hulu

I'd assume Comcast chose Hulu over Netflix because 1) they'll be able to exert their 30% Hulu ownership rights this year as the original Comcast-NBCU merger decree ends, and 2) they're going to make another run at taking over Fox's 30% of Hulu after the AT&T-TW merger judgment comes out next month.

Either way, this only increases the interest Comcast would have in Fox's assets (especially that 30% of Hulu).

 

[Paulio]

Another interesting note: DWA decided to change from Netflix to Hulu when their deal is up in 2020 for movies/tv shows streaming:
DreamWorks Animation Sets New Streaming Deal With Hulu

I'd assume Comcast chose Hulu over Netflix because 1) they'll be able to exert their 30% Hulu ownership rights this year as the original Comcast-NBCU merger decree ends, and 2) they're going to make another run at taking over Fox's 30% of Hulu after the AT&T-TW merger judgment comes out next month.

Either way, this only increases the interest Comcast would have in Fox's assets (especially that 30% of Hulu).

Also, Netflix is trying to focus on making its original content, and media conglomerates wanting to have total control over their own products. That's why Disney is launching its streaming service next year, and Viacom is doing the same thing this year as well. Comcast for all we know what they're doing isn't going to hesitate to go full speed on their intentions, so it looks like the company may have its "own" streaming service they need in order to compete with Disney and expand the NBCUniversal brand nationwide and around the world. This could rock the Disney/Fox deal and making it harder for Disney to completely merge with Fox.

 

[quinnmac000]

Another interesting note: DWA decided to change from Netflix to Hulu when their deal is up in 2020 for movies/tv shows streaming:
DreamWorks Animation Sets New Streaming Deal With Hulu

I'd assume Comcast chose Hulu over Netflix because 1) they'll be able to exert their 30% Hulu ownership rights this year as the original Comcast-NBCU merger decree ends, and 2) they're going to make another run at taking over Fox's 30% of Hulu after the AT&T-TW merger judgment comes out next month.

Either way, this only increases the interest Comcast would have in Fox's assets (especially that 30% of Hulu).

Dreamworks has deal with netflix which just got expanded for original shows and Amazon as well.

They just chose Hulu because they probably gave the best rate.

‘Fast & Furious’ Animated Series Set At Netflix | Deadline
Rocky and Bullwinkle Trailer Reveals DreamWorks, Amazon Series | Collider

I think more so Universal is planning to spread their influence as much as possible rather than isolate themselves into on niche service.

 

[zg44]

Dreamworks has deal with netflix which just got expanded for original shows and Amazon as well.

They just chose Hulu because they probably gave the best rate.

‘Fast & Furious’ Animated Series Set At Netflix | Deadline
Rocky and Bullwinkle Trailer Reveals DreamWorks, Amazon Series | Collider

I think more so Universal is planning to spread their influence as much as possible rather than isolate themselves into on niche service.

Yeah that's a good point.

I do think Comcast/NBCU are concerned about what happens as cable tv/pay tv declines.

i.e. If Amazon Prime, Netflix, Hulu, Disney's streaming service become the main OTT players along with a bunch of niche <10 million subscriber streaming services, where does that leave Comcast/NBCU? As just a seller to the big services or an owner of a niche service?

Do they really want to just be selling TV shows to those bigger services? Or do they want to own one of those like Hulu? Or create their own?

Because that future is coming, and it doesn't seem to be as profitable to just sell shows/movies to other services. The real value is in owning the service.

i.e. Disney's movie/tv contract with Netflix was worth a few hundred million a year..., but Netflix used that to help build their service worth >$100 billion.

The real value is in the subscribers, not the content. Every million subscribers is worth around $1 billion, whereas the content itself is time-limited or worth considerably less in a long-range view.

 

[zg44]

Exclusive: Comcast prepares all-cash bid to gate-crash Disney-Fox deal - sources | Reuters

There's the big news. Comcast is prepping a massive all-cash bid for Fox's assets and Sky. I'd assume they'll wait to see the AT&T-TW situation. If that gets the greenlight, then Comcast can play hardball.

Either way, this is nowhere near over.

 

[Galaxy Defender]

Exclusive: Comcast prepares all-cash bid to gate-crash Disney-Fox deal - sources | Reuters

There's the big news. Comcast is prepping a massive all-cash bid for Fox's assets and Sky. I'd assume they'll wait to see the AT&T-TW situation. If that gets the greenlight, then Comcast can play hardball.

Either way, this is nowhere near over.

Would love to see Comcast win on this one. On the other hand arranging that much financing limits their ability for other acquisitions.

 

[AlexanderMBush]

Exclusive: Comcast prepares all-cash bid to gate-crash Disney-Fox deal - sources | Reuters

There's the big news. Comcast is prepping a massive all-cash bid for Fox's assets and Sky. I'd assume they'll wait to see the AT&T-TW situation. If that gets the greenlight, then Comcast can play hardball.

Either way, this is nowhere near over.

 

[zg44]

Would love to see Comcast win on this one. On the other hand arranging that much financing limits their ability for other acquisitions.

To be fair, if Comcast gets Sky and Fox's assets, they wouldn't need any more acquisitions for a long time.

So they don't mind jumping their debt from $60bn to $150bn if this is their last major acquisition for 20 years.

 

[Galaxy Defender]

To be fair, if Comcast gets Sky and Fox's assets, they wouldn't need any more acquisitions for a long time.

So they don't mind jumping their debt from $60bn to $150bn if this is their last major acquisition for 20 years.

True, if we are talking media companies. I would love to see them competing for IP companies like the next Marvel or Lucasfilm.

 

[zg44]

True, if we are talking media companies. I would love to see them competing for IP companies like the next Marvel or Lucasfilm.

Yeah, they can finance acquisitions under $5bn with 1 year's cash flow (like the DreamWorks acqusition).

I don't think we'll see anything bigger than that from Comcast if they succeed with this play for Fox's assets. They'll be pretty limited in their ability to finance anything else too big.

 

[quinnmac000]

To be fair, if Comcast gets Sky and Fox's assets, they wouldn't need any more acquisitions for a long time.

So they don't mind jumping their debt from $60bn to $150bn if this is their last major acquisition for 20 years.

Cough cough *east asia* cough. They don't have Acquisition managers and executives in China, Japan, Korea, and Australia if they don't plan to buy up more.

 

[JungleSkip]

Insane

 

[zg44]

Cough cough *east asia* cough. They don't have Acquisition managers and executives in China, Japan, Korea, and Australia if they don't plan to buy up more.

Yeah, at this point though those would have to be bolt-on acquisitions if Comcast does get Fox's assets and Sky.

I don't think investors will want to add to their debt pile if it goes from $60bn to $150-160bn.

So that means they'd just have to use cash flow mostly for acquisitions under $5bn.

At least they'd get Star India if they succeed, one of India's biggest broadcasters.