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Romier S

Disney closing in on a deal to buy 20th Century Fox. Valued at over 60 billion. Could announce next week...

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Iger is staying on until 2021 as part of the deal (it'll likely take the best part of a year to finalise it as it is). I don't dislike him. He's incredibly business savvy, but I wish he respected the company's heritage more. They're protecting their film library, but opting to keep so much of it under lock and key. I'd quite like Bob Chapek to move on from his Parks and Resorts chairman position. 

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I did not realize just how few movies Disney releases in the grand scheme of things every year, yet make a boat load of cash because each one is a big tent pole. It will be interesting to see how they schedule things over the year now to not collide with each other.

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I’m not sure their model will change to be honest. As a consequence I’m deeply worried about the fate of Fox Searchlight given Disney’s interest in putting out nothing more than a handful of blockbusters each year. 

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Frankly it will have to change because Fox has so many popular franchises to cash in on. Investors are gonna want to see these properties used in one way or another, otherwise what was the point. Avatar is going to be a big one for sure.

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But Avatar is just another tentpole blockbuster that fits the current Disney release model perfectly though, AND is an IP that’s already part of Disney as one of their theme park attractions. They’re already set with those 9 or however many damn sequels Cameron is shooting back to back.

 

As for the other properties, that’s all this is about, and again it doesn’t conflict with Disney’s limited interests. That’s precisely the problem. By the time the deal is actually done Deadpool 2 and another Xmen movie will be out from the current Fox regime, after which Marvel will do whatever they want with those and the other stuff. Die Hard and Alien are decaying franchises with decreasing audience interest with each passing installment. What’s left? Avatar and more damn comic movies fit the existing Disney release model, so what will suffer is basically money going to standalone non ip related films we often see Fox produce, and Fox Searchlight productions. Even if Disney were interested in making the kind of films Fox currently makes they’ll still have to severely cut the number of movies being greenlit just to play fair with the other studios. This is potentially a very raw deal for filmmakers and film goers.

 

The TV stuff will fuel Disney’s streaming service, and I’m sure they will strip all Fox TV and movie catalogue material from Netflix and Amazon at the appropriate time (there are presumably existing contracts in place that Fox have with those services that will need to run their course).

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It's hard to imagine that they won't keep Fox as a separate division, given that they have been so focused on having Disney='family friendly' that they dumped their Miramax/Dimension catalog to Lions Gate a few years ago.  Even as far as comic book movies go, there's no way Logan or Deadpool gets made with a Disney label, and they aren't leaving that cash on the table.

 

What happens with Hulu in the long term will be interesting, given that Fox has been moving their content their once deals expire with Netflix.

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Well, a Deadpool 3 or and Logan sequel could well die under Disney.

 

My hope is that they might indeed feel they are ready to make more diverse films (non franchise films) and want a banner to do it under and want to have an avenue to make the type of prestige pictures Searchlight makes. I’m dubious though as they do very little with Touchstone and, as you say, they jettisoned the Miramax catalogue.

 

I think Hulu’s fate is sealed and will be rolled into their streaming service.

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Comcast has today made a huge $31 billion bid for Sky, outdoing 21st Century Fox's own bid by 16%. This could potentially disrupt the sale of Fox assets to Disney as the offer for Sky alone somewhat undermines the Mouse's $52.4m bid for everything that was on the table last year. While I'd imagine Sky is an asset Disney would be ok losing, since Sky and Sky News is what Murdoch desires absolute control of the most, he could well throw his toys out of the pram and turn round to Disney and demand more for the movie studio and TV content which could end up being more than Disney can justify spending. 

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Disney are apparently offering to buy Sky News early.

 

Quote

Disney has offered to buy Sky News to help Rupert Murdoch allay media plurality concerns and push through his £11.7bn takeover of Sky.

 

Murdoch’s bid is being scrutinised by the Competition and Markets Authority (CMA) amid concerns that buying the 61% of Sky he does not already own will give him too much influence over UK news media. The Murdoch family also control News UK, the owner of the Times, Sun and TalkSport radio station.

 

Disney has “expressed interest” in buying Sky News, a move that would clear media plurality concerns and pave the way for its own $66bn (£47bn) takeover of most of Murdoch’s 21st Century Fox, including Sky.

 

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“The Walt Disney Company has expressed an interest in acquiring Sky News, with a view to adding it to Disney’s existing portfolio of television channels, whether or not Disney’s proposed acquisition of 21st Century Fox proceeds,” said Fox in a statement.

 

Disney is hoping to get the deal done as its US rival Comcast, which owns assets including NBC Universal, is seeking to derail it with its own £22bn bid for Sky.
 

Separately, Fox has further beefed up its pledge to make Sky News independent within the Sky operation. Fox has said it will fund Sky News for at least 15 years, up five years on its previous offer and 10 years more than its original proposal.

 

It has also said that it will look to legally separate Sky News from Sky, using the same structure BT used with Openreach, which the media regulator, Ofcom, said was enough to allay competition issues raised by rivals.

 

https://www.theguardian.com/business/2018/apr/03/disney-offers-to-buy-sky-news-to-ease-murdochs-117bn-takeover

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It should speed up the progress of the Fox buyout if Fox agree, yes. Murdoch, rightfully, has faced a lot of pushback against owning all of Sky. I’m surprised he is willing to let Sky News go to be honest, as he would have been eager to turn it into a UK Fox News ultra right wing propaganda machine if he ever had it until his complete control. 

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Not 100% done yet. Approved by Sky, but Government now has 30 days to approve it. It definitely makes more sense for Comcast to have it. Although Disney could have been ok with the television network side of things, telecoms would have been new to them (it'll be fun to see if Comcast try to impose data caps in the UK post Brexit). I still don't understand Murdoch's interest in chasing Sky where, even under Fox acquisition, Disney would surely have eventually ended up taking it as part of that deal. What am I missing that still makes Murdoch relevant to a Sky buyout in the long term? 

 

It'll be very interesting to see if Comcast do indeed now progress to making a hostile bid for Fox and push Disney out of getting anything. 

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Hollywood Reporter has an interesting article about how messy things could be about to get if Comcast move to outbid Disney on remaining Fox assets:

 

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In what could kick off a bidding war, the cable giant on April 25 made official its $31 billion bid for Sky, even though the European pay TV company had previously agreed to let Fox, a 39 percent shareholder, purchase the portion it doesn't already own. That could be a prelude to Comcast launching a rival, and possibly hostile, bid for the same Fox assets that Disney in December agreed to buy, thus setting up a battle for size and leverage that, even by Hollywood standards, would be ferocious.

 

This corporate drama is playing out simultaneously in AT&T's court battle with the U.S. government over its plan to buy Time Warner for $85.4 billion. Wall Street insiders predict the Comcast-Disney-Fox showdown won't resolve itself until a judge determines the fate of AT&T-Time Warner, with a decision expected June 12. Indeed, if AT&T-Time Warner becomes a reality, Comcast and Disney suddenly would seem smaller and likely would be more motivated to scoop up Sky. Or those Fox assets. Or all of it.

 

"If AT&T-Time Warner is ruled legal and closes, we expect a new Comcast bid for Fox immediately," says BTIG analyst Richard Greenfield. "If Disney acquires the Fox assets they are trying to buy, it will give Disney unprecedented control of the legacy media landscape."

 

Roberts addressed at least one of the issues when he told Wall Street on April 25: "We didn't choose to put Sky in play. That event happened around us." In late February, B. Riley FBR analyst Barton Crockett wrote that if Comcast wins a majority stake in Sky, "the next obvious step is to pursue the rest. That road leads through Fox."

 

Comcast and Fox haven't commented on such a potential bid, but one insider said Comcast could look to win over Fox's board with a higher bid. After all, a recent regulatory filing on the Disney-Fox deal argued that "third parties would be unlikely to be deterred from making a superior proposal by the provisions of the combination merger agreement, including because the 21st Century Fox board may, under certain circumstances, furnish information or enter into discussions in connection with a competing proposal."

 

A Comcast hostile bid for the Rupert Murdoch-controlled assets could also be an option, which might play out like this: Roberts could unveil a competing offer at a premium to Disney's bid, since the cable giant had in December signaled to Fox it was willing to pay a 16 percent higher price than Disney. At the time, the Murdochs preferred Disney in part because of the regulatory risks of the Comcast offer amid the government's challenge to AT&T-Time Warner.

 

If Fox's board doesn't show any interest, Comcast could then take its case to investors ahead of a Fox special shareholder meeting to vote on the Disney deal that is expected to happen this summer. Comcast reportedly has started reaching out to several financial institutions that are big Fox shareholders. (The Murdochs have a 39 percent voting stake in Fox, but in the shareholder vote, only their 17 percent economic stake would count.)

 

Comcast would, like Disney, highlight that owning large parts of Fox would allow it to boost original content spending across its business, including Fox networks, and reap similar benefits from combining both sides' studio units. It also can be expected to highlight the benefits of guaranteed distribution of Fox networks by the largest U.S. cable operator (with 22.3 million pay TV subscribers) and the success it has had with operating content as well as distribution assets since its 2010 purchase of NBCUniversal.

 

And since Disney doesn't own a pay TV distributor, Comcast should be able to yield higher synergies in a Fox deal, analysts say. "Disney is forecasting at least $2 billion of cost synergies from the Fox transaction and over $1.3 billion of revenue synergies," says Greenfield. "If those forecasts are reasonable, Comcast's synergies should be able to reach $4 billion."

 

While Roberts, 58, and Iger, 67, both appear to want dominion over the premier media-entertainment conglomerate, there's more than mere ego at stake, as each needs increased scale to compete with tech giants like Apple, Amazon and Google now wading into movies and TV. Mergers and acquisitions, in fact, are coming fast and furious across the industry, with PricewaterhouseCoopers saying April 26 that media-entertainment M&A reached a two-year high in the first quarter.

 

"Disney and Comcast sit at the edge of a strategic precipice with much at stake," says Steven Cahall of RBC Capital Markets. "Both companies are large, no doubt, but seek even greater scale."

 

Both companies face regulatory scrutiny for their plans, but some insiders note that Roberts is a winner no matter what happens, as he'll likely succeed in jacking up the price Fox will pay for the remaining 61 percent of Sky it has been trying to purchase since December 2016, as well as what Disney would ultimately pay for those Fox assets, which include the cable networks FX and Nat Geo as well as the film and TV studios.

 

 

https://www.hollywoodreporter.com/news/comcasts-last-ditch-plan-snatch-fox-disney-1107648

 

 

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Yup. Echos the Hollywood Reporter article I posted last week. Disney would have to counter bid with a higher offer, the problem being their original offer included Sky, and Sky shareholders now seem clear on the network going to Comcast so Disney may well have to pay a lot more now for less in return. How they respond will really depend on just how much they want those Marvel leftovers and original Star Wars rights I suppose.  

 

Arguably one of the most important points of the cnbc article:

 

Quote

Comcast believes Disney cannot match an all-cash bid for Fox because if it adds more stock to a deal, Fox stock will go down, depressing the value of the offer, sources told CNBC.

 

 

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Fuck Comcast, sure. But my Twitter timeline here in the UK is getting flooded by adverts from Fox trying to bully Ofcom into letting them buy all of Sky; they know that's required for Disney to come back with a bigger offer.

 

And fuck Murdoch and all his politics (I'll stop there, before I drag us into trouble).

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3 hours ago, iainl said:

Fuck Comcast, sure. But my Twitter timeline here in the UK is getting flooded by adverts from Fox trying to bully Ofcom into letting them buy all of Sky; they know that's required for Disney to come back with a bigger offer.

 

Ah now that's a good point. That has to be the only reason for Fox to keep pursuing the issue. I didn't consider that. 

 

 

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Certainly seems like it to me - the initial, already trumped, bid was made on the assumption that they were getting the whole of Sky as part of it. No way Disney can sell their shareholders on now bidding more for less, as I see it.

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I don't want Disney to own the world.  But at least we get cools movies and theme parks out of it.  If Comcast buys Fox, we get nothing positive.  Probably only negative.  I'd rather Hitler bought Fox.

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