Disney Analyst
Well-Known Member
The game of world domination?
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News Disney and Fox come to terms -- announcement soon; huge IP acquisition
- Thread starter ohioguy
- Start date
The game of world domination?
I agree that letting Comcast get Sky can lead to a solution to the Marvel problem. However the more I read about Sky the more I think Disney wants it. But think about this. Anyway, I am glad that we will know the winner soon and no matter how it turns out I think Disney will be a bigger and stronger company than it was and this it will be good for Parks and Resorts either way.
Disney Analyst
Well-Known Member
Does anyone know what the size of the company will be once this acquisition goes through? How much of an increase are we looking at here? Do they build a new HQ to house all this? Do they squish it all into current buildings? Do they acquire existing HQ’s?
the.dreamfinder
Well-Known Member
Well, thousands of employees are expected to be laid off in the areas where they overlap. Disney will lease the Fox lot in Century City for five years after the deal is completed. Disney will likely finally build out Golden Oak Ranch to accomdate 20th and they have plenty of underdeveloped real estate in Glendale so they have the ability to absorb Fox on the west coast. ABC is currently in the planning stages of building a new facility in NYC, so east coast Fox assets will likely be integrated into that project. Sky and Star won’t be touched. And back to consolidation, Disney and Fox’s international studio outposts will be culled.
bartholomr4
Well-Known Member
Here are the bidding rules (from Dow Jones)
Under the auction rules, Fox, as the lowest bidder so far, can make the only bid in the first round. In the second round, Comcast can make a counterbid. If that doesn't determine a winner, then both parties can submit offers in the third and final round. The bids won't be made public until after the auction's completion Saturday evening. Both parties will see each other's bids in the 3rd round, and can end up with the same bid. In this instance, the resolution would likely be put in shareholders hands to select a preferable owner.
Fox could drop out of the auction before its official start. But Fox has reason to participate -- even if it expected to ultimately lose. By owning 39% of Sky, Fox can benefit if its participation drives up Comcast's bid in the auction. That would allow Fox to sell that minority stake to Comcast for more money.
One additional Item.... The bids can only be made in a fixed cash in Pounds Sterling, which means Disney can't match Comcast price with a mixture of Cash and Stock....
Under the auction rules, Fox, as the lowest bidder so far, can make the only bid in the first round. In the second round, Comcast can make a counterbid. If that doesn't determine a winner, then both parties can submit offers in the third and final round. The bids won't be made public until after the auction's completion Saturday evening. Both parties will see each other's bids in the 3rd round, and can end up with the same bid. In this instance, the resolution would likely be put in shareholders hands to select a preferable owner.
Fox could drop out of the auction before its official start. But Fox has reason to participate -- even if it expected to ultimately lose. By owning 39% of Sky, Fox can benefit if its participation drives up Comcast's bid in the auction. That would allow Fox to sell that minority stake to Comcast for more money.
One additional Item.... The bids can only be made in a fixed cash in Pounds Sterling, which means Disney can't match Comcast price with a mixture of Cash and Stock....
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If Disney does win the bidding war, expect Comcast to go all out against Disney in the themepark war. In turn Disney will have to respond and themepark fans will win big time. On the other hand if Disney plasys nice and Comcast wins expect a deal like Rodan75 mentioned above. The only thing that appears certain is that Sky will go for more than Comcasts current bid otherwise there would be no asuction.
JoeCamel
Well-Known Member
Why would this incite a theme park war? You really expect them to pour more money than they are into the parks?. If they did you end up with more TSL and F&F things.
This is about eyeballs for content not the parks.
the.dreamfinder
Well-Known Member
Well, they could always start by firing Tom Williams and Mark Woodbury and bring in free agent Matt Ouimet.
AnotherDayAnotherDollar
Well-Known Member
Bloomberg thinks Comcast is the most likely winner at an avergae of 16.53 pounds/share according to people surveyed. Current bid is 14 pounds/share from Fox and 14.75 pounds/share from Comcast.
https://www.bloomberg.com/news/arti...-for-sky-could-be-resolved-in-one-day-auction
Disney would ideally like to win this as otherwise they would have to try to break into that market with Hulu, DisneyPlay, and ESPN. All of which are non existent there. It'll be an uphill climb. Regardless though, they'll make out well as I think they'll bid 15 pounds/share, Comcast comes back with 16 pounds per share, final bid Disney goes up or matches and Comcast goes up to 17 pounds/share or so.
That drives up that 39% of Sky quite nicely and it does indeed set up the scenario for an asset swap of 30% of Hulu + the marvel rights. That said I wouldn't expect Marvel theme park rights in Orlando to swap overnight. Most likely scenario in this situation would be the contract gets amended with an end date (say 10 years from now), removal of exclusivity in Orlando (so both parks can use it during that period, and removal of exclusivity of the word Marvel.
https://www.bloomberg.com/news/arti...-for-sky-could-be-resolved-in-one-day-auction
Disney would ideally like to win this as otherwise they would have to try to break into that market with Hulu, DisneyPlay, and ESPN. All of which are non existent there. It'll be an uphill climb. Regardless though, they'll make out well as I think they'll bid 15 pounds/share, Comcast comes back with 16 pounds per share, final bid Disney goes up or matches and Comcast goes up to 17 pounds/share or so.
That drives up that 39% of Sky quite nicely and it does indeed set up the scenario for an asset swap of 30% of Hulu + the marvel rights. That said I wouldn't expect Marvel theme park rights in Orlando to swap overnight. Most likely scenario in this situation would be the contract gets amended with an end date (say 10 years from now), removal of exclusivity in Orlando (so both parks can use it during that period, and removal of exclusivity of the word Marvel.
The bidding process is interesting. If Disney bids more than Comcasts currect offer, Comcast either bids more in round 2 or drops out. Now is where it gets interesting. If Comcast does bid more then there is a round 3 in which both Disney/Fox make their finsl bids. So Comcast can't make their top bid in round 2.
So what should Disney bid in round 1. I think they should bid £16.00 and see what Comcast bids in round 2. Then if Comcast does out bid them decide if it is worth matching the bid in round 3 or going a little higher. Remember there can be a tie and in the event of a tie Disney should win as they only need to get just over 18% of the 61% they don't own through Fox. There is also the possibiliy that even if Comcast wins the auction they won't get the 81.9% of the 61% of the owners to agree to their offer since there is no legal obligation to sell unless the majoroty agree.
So what should Disney bid in round 1. I think they should bid £16.00 and see what Comcast bids in round 2. Then if Comcast does out bid them decide if it is worth matching the bid in round 3 or going a little higher. Remember there can be a tie and in the event of a tie Disney should win as they only need to get just over 18% of the 61% they don't own through Fox. There is also the possibiliy that even if Comcast wins the auction they won't get the 81.9% of the 61% of the owners to agree to their offer since there is no legal obligation to sell unless the majoroty agree.
AnotherDayAnotherDollar
Well-Known Member
Do you know if the bids in round 1 and 2 are public or private? The final, winning, 3rd round bid will be made public by 09/27, but it would be nice to know the first 2 rounds before hand. Things start today at noon EST.
https://www.hollywoodreporter.com/news/battle-sky-comcast-fox-set-auction-saturday-1143984
I am not sure but as long as they announce there will be a round 2 and or 3 it will not matter. We can be sure that Disney/Fox bid more than £14.75 if there is a round 2. Then there will be no way of knowing the bids until the Board makes their announcement. Now under the rules it would be very interesting if Disney/Fox bid £14.74. Based on the rules it would appear that both final offers would go to the shareholders and they would have to decide which offer to take. A difference that small would give Disney a great chance to win.
bartholomr4
Well-Known Member
Disney/Fox is in the driver seat.... Because they own 39% which Comcast wants to own, they can push up the cost for the remaining 61% and if the winner will pay less for the assets than Disney (because the 39% is being purchased for 14.00).
Said another way, For Disney/Fox to pay the same total amount for Sky, that Comcast is currently committed (at 14.75), Disney/Fox can bid 15.23. If Comcast matches that bid (or slightly beats it), Disney could increase their bid to 16.05 and still be paying the same amount Comcast would be at 15.23.
This advantage suggests (Game Theory - My opinion) Comcast will save its best offer for the 3rd round. So, if you are looking at the total cost, and return on investment, 15.23 would be a good opening bid. Of course Disney would want to get it cheaper, so perhaps a bid of 14.76, to force the next round would be warranted (to obtain the highest bid), and force Comcast to show their hand a little in Round 3.
On the other hand if Disney / Fox only want to push up the price of Sky - To recoup some of the $$$ Comcast forced them to pay up for 21st Century Fox, then Disney will want to open with their Best offer, and, Force Comcast to overpay.
Said another way, For Disney/Fox to pay the same total amount for Sky, that Comcast is currently committed (at 14.75), Disney/Fox can bid 15.23. If Comcast matches that bid (or slightly beats it), Disney could increase their bid to 16.05 and still be paying the same amount Comcast would be at 15.23.
This advantage suggests (Game Theory - My opinion) Comcast will save its best offer for the 3rd round. So, if you are looking at the total cost, and return on investment, 15.23 would be a good opening bid. Of course Disney would want to get it cheaper, so perhaps a bid of 14.76, to force the next round would be warranted (to obtain the highest bid), and force Comcast to show their hand a little in Round 3.
On the other hand if Disney / Fox only want to push up the price of Sky - To recoup some of the $$$ Comcast forced them to pay up for 21st Century Fox, then Disney will want to open with their Best offer, and, Force Comcast to overpay.
happycamperuni
Active Member
Neither side changed offers as of the Friday deadline in London. That means that the bidding war will begin and end tomorrow in London. Should be a very interesting 24 hours.
Rodan75
Well-Known Member
I think this may be the potential strategy. Help offset what Comcast did to Disney.
Quinnmac000
Well-Known Member
Comcast will not give up their 30% of Hulu. Jeff Shell made that clear at a conference a week ago after he got his board seat. Ever since Disney decided not to play nice and possibly split assets in the Fox Deal, Brian will make this as brutal for them as possible.
Rodan75
Well-Known Member
Now that will be interesting. If Comcast has already signalled that they aren't willing to sell their share of Hulu, then Disney has no reason to be gentle today/tomorrow for SKY.
I don't think that Disney needs Hulu, it is a nice to have and not a requirement.
Quinnmac000
Well-Known Member
I think Disney needs Hulu and those boards seats because I don't think Disney standalone service in the long term will be as successful as WDAS hopes.
I think Disney learned from CBS All access the dangers of putting all your eggs in one basket and then later having to push deals out for your product to be shown elsewhere.
That's why Disney is seemingly changing course to making the streaming service the sole home for Disney kid properties and still willing to spread it out.
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Rodan75
Well-Known Member
I’m not sure that anyone thinks CBS put more than one egg barely in the CBS All Access bucket. ESPN+’s progress has been significant and may give Disney confidence to go it alone.
AnotherDayAnotherDollar
Well-Known Member
I need a link so I can hear or read this myself to make sure I get the whole context.
Roberts, try as he might, already failed once, but he did make it brutal for Disney as Disney will have to pay $19B more. This is a win win for Disney no matter how one tries to slice it. If they win at 15-16, then they pay a bit of a premium for a very attractive product (they are on the hook now for 14). If Comcast overpays at 17-18+ then Disney gets overpaid for their 39% and return the favor that Comcast did them earlier this year. 39% of Comcast, even at Comcast's current bid is worth more than 4 times the 30% of Hulu.
Also , Disney could not split the assets of Fox at that time. It was brought up, talked about, and discovered that they couldn't do to the signing they had with Fox for those assets from December 2017. I don't know what you're talking about there. You've been following this for awhile and should know that.
Disney's content is significantly more attractive than CBS', even before including Pixar, Marvel, Lucas, and Fox. It's a poor comparison at best. Iger himself has said that they would be releasing the streaming service regardless of the acquisition. Hulu is coming into play because 1) People should be bullish on it, 2) Disney will have majority, 3) Disney saw a place where they can put hard PG-13 and R rated content (i.e. some Fox, Touchstone, Hollywood, Marvel films and TV shows).
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