The AT&T and Time Warner merger could mean plenty — or nothing — to consumers, depending on a federal judge’s decision. USA TODAY
The board of Twenty-First Century Fox is expected Wednesday to consider Comcast’s $65 billion bid for a collection of Fox entertainment assets the media company is looking to sell.
That proposal surpasses one made in December by The Walt Disney Co., which offered $52.4 billion in stock and cash for the assets, including Fox’s TV and movie studios. But Comcast made its own offer, about a 20 percent premium to Disney’s, last week after a federal judge approved AT&T’s $85 billion acquisition of Time Warner.
The decision sent a signal that regulators may look favorably on consolidation of film and TV content by media companies also in the business of distributing content and providing broadband connections.
Last week, the Rupert Murdoch-controlled Fox said it would “carefully review and consider the Comcast proposal” and it is expected to be one of the topics Wednesday at a previously scheduled board meeting. The Fox board, which includes Murdoch and his sons Lachlan and James, agreed to Disney’s offer last year. It could decide to approve Comcast’s bid. That would give Disney five days to up its own offer.
Wall Street analysts expect a heated bidding war between Comcast and Disney for Fox’s assets, which also include Fox’s 30 percent share of streaming service Hulu and a 39 percent stake in U.K.-based pay-TV and broadband provider Sky.
Comcast CEO Brian Roberts has stated interest in the Fox studios’ content and its international assets, which also include Mumbai-headquartered media company Star India Star.
“We believe our proposed acquisition of Fox would not only enhance our domestic positions in distribution and content but would take us to global reach and additional growth in these businesses,” he said last week.
Fox’s movies and TV content — films such as Avatar and series such as The Simpsons — are vital to Disney, too. CEO Robert Iger has said they would enhance its planned subscription video service, expected to begin streaming in 2019.
“Disney can still prioritize direct-to-consumer initiatives without Fox, but its propositions to consumers and creators of content would be stronger with Fox but weaker without those businesses,” said Brian Wieser, an analyst with Pivotal Research Group, in a note to investors this week. He downgraded Disney shares from a Hold to Sell. “For this reason, the absence of a Fox transaction would be subjectively negative for Disney.”
The Comcast-Disney bidding war for Fox is just one of a wave of deals expected in the wake of the AT&T-Time Warner merger approval as longtime media and entertainment companies seek to strengthen their own positions countering newer, tech-savvy players such as Netflix, Amazon, Facebook and Google.
These machinations will mean a lot for consumers as media companies bolster their content collections for even better streaming services. “All of these deals are still just the beginning. They are the ones on the table now,” said Jim Nail, principal analyst for research firm Forrester. “I fully expect to see a whole lot more happening before the end of the year.”
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.