Comcast Reportedly Won’t Top Disney’s Fox Bid; Fox May Cede Sky to Comcast
Comcast is apparently shifting their focus from trying to outbid Disney for 21st Century Fox’s assets (which include 20th Century Fox, Fox Searchlight, National Geographic, and a 30% stake in Hulu, among others) to looking toward acquiring the majority stake in Sky. Meanwhile, Disney and Fox are potentially signalling that they’ll be fine to cede control over Sky to Comcast if it means that there will be an end to the bidding war on both fronts.
CNBC (which, full disclosure, is a Comcast-owned publication) is reporting that Comcast are unlikely to make another bid for 21CF after Disney received antitrust approval necessary to acquire the vast majority of 21st Century Fox’s entertainment assets that were for sale; Disney only has to divest certain Fox Sports Networks shortly after the completion of the deal. Meanwhile, the recent decision to try to appeal AT&T and Warner Media’s merger spells further trouble for Comcast if they were to go about trying to get that same kind of approval. Disney has an advantage in that they merely produce content, making their planned acquisition of Fox a horizontal merger; meanwhile, Comcast’s proposed acquisition of Fox would be a vertical merger because they also distribute content, which is what caused significant delays to AT&T and Warner Media’s merger in the first place.
So it appears as though Comcast is making a concession of 21CF to Disney because this battle isn’t likely one that they can win. However, on the other side of the field, it’s now looking as though Disney and Fox have come to the conclusion that Comcast would have a much easier time shifting all of their focus toward acquiring Sky; roughly 61% of a stake in the company is for sale while the remaining 39% are at 21st Century Fox (which should transfer over to Disney once they acquire them). Fox recently raised their stake for that remaining 61% to $32.5B, which Comcast countered with a slightly-sweeter $34B bid. With their eyes off of the 21CF prize, that gives them more resources to focus on picking up Sky, and it doesn’t seem like Fox wants another bidding war to slow down their merger with Disney.
Recently, Disney has mentioned that Fox may not boost their offerings on that bid for the remainder of Sky, and the company also noted that if Fox had any intention of increasing their debt for the purposes of making a higher bid, then they would need Disney’s consent (which they may not want to give) in order to do so. Because of this, it’s sounding a lot like Disney and Fox may be content with letting Comcast get off with the majority share of Sky; should Comcast acquire Sky instead, that would mean that that much less debt is on the shoulders of Disney and Fox. In any case, split control over Sky would at least ease the concerns of media consolidation that some people have in the face of these mammoth deals.
Grant Davis is a freelance writer who has covered entertainment news for more than seven years. His articles have frequently appeared in Star Wars News Net as well as as other entertainment-related websites. As someone who grew up on Star Wars and comic book movies, he’s completely thrilled with the current era of genre entertainment.
