News Disney and Fox come to terms -- announcement soon; huge IP acquisition

[Rodan75]

They officially shut down DisneyToon today and cancelled the Cars-Planes space spin off that was to go the DTC service.

Maybe they are making room for Blue Sky? I’m sure it would have happened regardless, but I kinda assumed DisneyToon would transition to full time development of DTC streaming animated movies.

 

[Twilight_Roxas]

Didn't know that Disneytoon still exist.

 

[TwilightZone]

They officially shut down DisneyToon today and cancelled the Cars-Planes space spin off that was to go the DTC service.

Maybe they are making room for Blue Sky? I’m sure it would have happened regardless, but I kinda assumed DisneyToon would transition to full time development of DTC streaming animated movies.

This is the best day in disney history

 

[Rodan75]

This is the best day in disney history

I know much of what they produced was crap, but there were some gems in there. So I’m a little sad there won’t be a 3rd column of Animation production, unless they keep Blue Sky (which I hope the do).

 

[AnotherDayAnotherDollar]

Fox has some stale IP like Die Hard, Independence Day and Aliens but are also well known. I wonder what will happen to those. Get some new young directors to reboot them all and see what happens?

Although they are only gaining the distribution rights to Avatar (Cameron will still own the IP) I bet Disney will help finance and make $1 billion on each of those 4 sequels

Avatar IP is - at the very least - co owned by 21CF. In all likelyhood it is co owned between 21CF and Lightstorm. All public evidence points to this.

They officially shut down DisneyToon today and cancelled the Cars-Planes space spin off that was to go the DTC service.

Maybe they are making room for Blue Sky? I’m sure it would have happened regardless, but I kinda assumed DisneyToon would transition to full time development of DTC streaming animated movies.

Blue Sky is much better and more talented than DisneyToon. That would be a major upgrade. Get whoever from DisneyToon that is talented on one of the other animation studios and call it a day.

Blue Sky would actually fit nice into what DisneyToon was supposed to be. Smaller budgeted movies, some direct to video (in this instance DTC) and some theatrical releases. I actually think they would do very well to create movies in the SW and Marvel universe. Maybe even Avatar.

 

[mab7689]

So now we have DOJ approval and a date for the shareholder vote, what are our estimates for when the deal will close? That's permitting Comcast are held off obviously.
Would it likely get the remaining international regulatory approvals and be finalised inside 2018?

 

[mab7689]

That is good...and adds a clock to any Comcast rebuttal.

There are been various stories between last night and this morning...it looks like I wasn't the only person who was confused by the rest of the domestic regulatory approvals. FCC did officially decline to review and Congress did not review. So it really is just the international regulatory approvals, and it doesn't sound like UK/EU care if they approved the SKY News purchase in conjunction with the Fox Purchase. As @seascape mentioned, the rest should all sail through (if they haven't already, I haven't researched where all of those are).

I'm trying to research where these are too but not having any joy haha. I've just assumed UK, EU and India based on what's included but don't know of anything else. I am in the UK myself so am keeping tabs on things our end.
Our government has already made a conditional ruling on Fox taking over Sky, on the condition they divest Sky News, which Disney have already agreed to buy. I'll post more in here on what developments we'll get on that front.

 

[seascape]

I expect the deal to close in the Fall and the RSNs to be sold and off the books by the end of the year. As soon as the merger is approved on July 27, Disney can start looking for a buyer. In fact any company that is interested is probably getting their offer ready. It will be interesting to see if they are sold as a package or individually or in several groups.

 

[seascape]

If Disney gets Hasbro then they would have Power Rangers again.

They would also get Transformers and My Little Piny.

 

[Stripes]

By the way, the assumed value of Fox's RSN's has been $19 billion. This is based on an estimation by MoffettNathanson, which assumed a $2 billion EBITDA and a 10x EV/EBITDA. Fox doesn't give any info with regard to the RSN's performance but that $2 billion is way too high from what I've gathered.

 

[the.dreamfinder]

I expect the deal to close in the Fall and the RSNs to be sold and off the books by the end of the year. As soon as the merger is approved on July 27, Disney can start looking for a buyer. In fact any company that is interested is probably getting their offer ready. It will be interesting to see if they are sold as a package or individually or in several groups.

I thought the RSNs would just go back to New Fox?

 

[seascape]

I thought the RSNs would just go back to New Fox?

No, however they could actually buy them back. Under the original Comcast offer every Division had a price assigned to it and Fox had to agree to take them back if the government objected. Fox did not want the risks put back on them and that was one of the several reasons they originally took the lower Disney offer. Comcast made so many mistakes in the original negotiations and that is why they are losing. On the other hand Disney knew what they wanted and made every agreement to get it so it was approved in just 6 months.

 

[Twilight_Roxas]

But did

They would also get Transformers and My Little Piny.

you get the reference of Disney getting Power Rangers again?

 

[Rodan75]

No, however they could actually buy them back. Under the original Comcast offer every Division had a price assigned to it and Fox had to agree to take them back if the government objected. Fox did not want the risks put back on them and that was one of the several reasons they originally took the lower Disney offer. Comcast made so many mistakes in the original negotiations and that is why they are losing. On the other hand Disney knew what they wanted and made every agreement to get it so it was approved in just 6 months.

Honestly, the way that Disney has managed this process, it seems amazing that they haven't done an acquisition of this scale since ABC/Cap Cities. Everyone assumed that Comcast had the leg up in negotiating through the regulatory process due to their acquisition history, I believe they even touted that experience a couple of weeks ago.

 

[seascape]

Honestly, the way that Disney has managed this process, it seems amazing that they haven't done an acquisition of this scale since ABC/Cap Cities. Everyone assumed that Comcast had the leg up in negotiating through the regulatory process due to their acquisition history, I believe they even touted that experience a couple of weeks ago.

Comcast touted their experience in merging big diverse companies into Comcast. That is not the same thing as negotiating a deal quickly. In fact they did fight and finally had to agree with restrictions, which by the way many think they broke. Do I think they did a great job with NBC Universal? Yes and not to take anything away from them if you look at what is left of GE it isn't hard to think anyone would have done better.

 

[Rodan75]

Comcast touted their experience in merging big diverse companies into Comcast. That is not the same thing as negotiating a deal quickly. In fact they did fight and finally had to agree with restrictions, which by the way many think they broke. Do I think they did a great job with NBC Universal? Yes and not to take anything away from them if you look at what is left of GE it isn't hard to think anyone would have done better.

Definitely agree. I think it is safe to say that Comcast would do a great job integrating with 21CF, they are good operators.

 

[mikejs78]

There seems to be some pixie powder interfering with the analysis here...

Why on earth would the fox shareholders NOT want another counteroffer?

This is about money...and in the end...the winner is always whoever throws the most - no matter what jury rigging is going on. At a minimum...it means more haggling and more bloat to the offers.

People aren’t actually believing Rupert Murdoch’s perceived “preferences”, are they?

The old cranky coot has made billions off lying...or is this a secret??

This has nothing to do with pixie dust and everything to do with risk analysis. Money isn't the only factor - at this point in the process, risk also plays a significant factor, and the risk with Comcast is substantially higher. Right now, Disney has regulatory approval, so the risk associated with this deal not going through is very low (for arguments sake, say < 5%). Conversely, with Comcast, the risk is substantially higher. Let's say the risk is 33% that the deal wouldn't go through because of regulatory action. Now let's say Comcast bids $80B to Disney's $71B. The calculus to Fox's shareholders is: do I take the near-sure thing at $71B, or do I take the higher $$$ amount with the risk that I may get nothing at all? Now, if Comcast's bid is substantially better, the calculus may be that the risk is worth it. But if it's marginally better, or even moderately better, Fox shareholders may decide to take the sure thing with Disney and cash out rather than risk getting nothing with Comcast, even if the potential reward is higher.

It's like saying that you have two doors. Behind door #1, there's a 99.9999% chance that there is $10M. Behind door #2 there's a 50% chance that there's $15M. Do you take the almost sure $10M, or do you go for the coin-toss for the $15M? Does that change if the $15M is $50M? Where's that line?

Personal feelings about the impact this deal would have on Disney, If I were a Fox Shareholder, I'd vote Disney unless Comcast came in and put in a significantly higher bid that Disney didn't match, because I would want the sure thing.

 

[Sirwalterraleigh]

This has nothing to do with pixie dust and everything to do with risk analysis. Money isn't the only factor - at this point in the process, risk also plays a significant factor, and the risk with Comcast is substantially higher. Right now, Disney has regulatory approval, so the risk associated with this deal not going through is very low (for arguments sake, say < 5%). Conversely, with Comcast, the risk is substantially higher. Let's say the risk is 33% that the deal wouldn't go through because of regulatory action. Now let's say Comcast bids $80B to Disney's $71B. The calculus to Fox's shareholders is: do I take the near-sure thing at $71B, or do I take the higher $$$ amount with the risk that I may get nothing at all? Now, if Comcast's bid is substantially better, the calculus may be that the risk is worth it. But if it's marginally better, or even moderately better, Fox shareholders may decide to take the sure thing with Disney and cash out rather than risk getting nothing with Comcast, even if the potential reward is higher.

It's like saying that you have two doors. Behind door #1, there's a 99.9999% chance that there is $10M. Behind door #2 there's a 50% chance that there's $15M. Do you take the almost sure $10M, or do you go for the coin-toss for the $15M? Does that change if the $15M is $50M? Where's that line?

Personal feelings about the impact this deal would have on Disney, If I were a Fox Shareholder, I'd vote Disney unless Comcast came in and put in a significantly higher bid that Disney didn't match, because I would want the sure thing.

It’s about risk analysis for you...

But if you peel the banana on many of the quotes here...it’s about wanting a perceived “win” for thy holy magic kingdom and pin lanyard.

I’m not even sure it would be a “win”...anyway.

But when someone accuses Comcast of being “greedy” over and over again...the dust is out...

As if Disney is St. Jude’s

 

[happycamperuni]

By the way, the assumed value of Fox's RSN's has been $19 billion. This is based on an estimation by MoffettNathanson, which assumed a $2 billion EBITDA and a 10x EV/EBITDA. Fox doesn't give any info with regard to the RSN's performance but that $2 billion is way too high from what I've gathered.

I thought Disney said they were only selling $1bn in EBITDA assets, so that sounds like an overestimate.

 

[mikejs78]

It’s about risk analysis for you...

But if you peel the banana on many of the quotes here...it’s about wanting a perceived “win” for thy holy magic kingdom and pin lanyard.

I’m not even sure it would be a “win”...anyway.

But when someone accuses Comcast of being “greedy” over and over again...the dust is out...

As if Disney is St. Jude’s

As much as I would love to see the X-Men in MCU movies, I'd rather this deal not happen at all. Mergers of this scope are very difficult and take a lot of a company's energy and effort to make successful (not to mention capital). Frankly I think it was really the ABC/Capital Cities merger that ultimately sank Eisner. It took a lot of the focus and energy away from running the rest of the business. Pixar, Marvel, and Lucas were all different in that they were fairly self-contained, smaller acquisitions that complimented Disney well. This one just has so many angles that there's a lot of room for things to go wrong, and it will take a decade before it all settles out.