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

[bartholomr4]

Another article talking about Hulu and Comcast (and how it won't want to sell it) in Barrons:

https://t.co/JtrwfQyEQo

"If Hulu becomes an essentially Disney-only product, the full-price licensing revenue NBC generates from its content on Hulu will disappear. “So not only does Comcast help Disney by exiting Hulu...Comcast actually hurts themselves by leaving the Hulu magical ‘revenue creation machine,’” wrote Greenfield."

"Greenfield noted that Comcast needs the same data “to better understand the threat posed to its core cable business or to help Comcast understand how it can launch their own [streaming] offerings in the future.” He estimated that the strategic value of those insights is far greater than the up to $5 billion that Comcast would get from selling its Hulu stake."

"Business aside, Comcast may have a personal motive strong enough to keep its 30% stake, Greenfield added: “Relations between Disney and Comcast have been and continue to be poor. These two companies and their senior executives are NOT friends…. Comcast remaining in Hulu and keeping three Board seats that enable them to have a say in Hulu’s future will drive Disney absolutely crazy.”

 

[Rodan75]

Another article talking about Hulu and Comcast (and how it won't want to sell it) in Barrons:

https://t.co/JtrwfQyEQo

"If Hulu becomes an essentially Disney-only product, the full-price licensing revenue NBC generates from its content on Hulu will disappear. “So not only does Comcast help Disney by exiting Hulu...Comcast actually hurts themselves by leaving the Hulu magical ‘revenue creation machine,’” wrote Greenfield."

"Greenfield noted that Comcast needs the same data “to better understand the threat posed to its core cable business or to help Comcast understand how it can launch their own [streaming] offerings in the future.” He estimated that the strategic value of those insights is far greater than the up to $5 billion that Comcast would get from selling its Hulu stake."

"Business aside, Comcast may have a personal motive strong enough to keep its 30% stake, Greenfield added: “Relations between Disney and Comcast have been and continue to be poor. These two companies and their senior executives are NOT friends…. Comcast remaining in Hulu and keeping three Board seats that enable them to have a say in Hulu’s future will drive Disney absolutely crazy.”

Following Greenfield through this process has been laughable. He has been just as clueless as we have been on the Disney-Fox-Comcast machinations, but he gets paid for it. Most of us have just had fun speculating on strategy.

 

[mikejs78]

First let me say I think Disney wanting to keep Hulu is the more likely scenario - but that there are some hurdles here that make it interesting and make a Comcast buyout of Hulu possible.

Surely Disney will want Hulu as that’s where a lot of the Fox content is going isn’t it?

So they say. They also said that Sky was the 'crown jewel' of the Fox assets.

I find this scenario a little less likely. I can’t imagine that Disney will happily give up a DTCplay with 20M customers.

The problem though with Hulu is that Disney cant really control it, even with 60%. Comcast and AT&T have significant rights to affect it's direction, even as minority shareholders. I could see a scenario where Comcast refused to sell and frustrates Disney's plans for Hulu, so much so that it's easier for Disney to sell and do something else with the Fox content than to try and work with Comcast.

 

[bartholomr4]

The problem though with Hulu is that Disney cant really control it, even with 60%. Comcast and AT&T have significant rights to affect it's direction, even as minority shareholders. I could see a scenario where Comcast refused to sell and frustrates Disney's plans for Hulu, so much so that it's easier for Disney to sell and do something else with the Fox content than to try and work with Comcast.[/QUOTE]

I totally agree with this..... Why invest in it and have your competitors benefit from your investment? But, more to come here, I am sure we all agree...... Thought you would enjoy the article....

 

[Lensman]

The problem though with Hulu is that Disney cant really control it, even with 60%. Comcast and AT&T have significant rights to affect it's direction, even as minority shareholders. I could see a scenario where Comcast refused to sell and frustrates Disney's plans for Hulu, so much so that it's easier for Disney to sell and do something else with the Fox content than to try and work with Comcast.

I totally agree with this..... Why invest in it and have your competitors benefit from your investment? But, more to come here, I am sure we all agree...... Thought you would enjoy the article....

What's the current content breakdown for Hulu between Disney, Fox, Comcast (NBC/Universal), and AT&T (Time-Warner)? And if either Disney or Comcast buys out the other, what will they decide to do about the content rights? And the rights to the Hulu-original content?

I also don't see that the CBS All-Access route is a more attractive one for Fox content or NBC/Universal content.

 

[bartholomr4]

I think we would all like to see this.... I don't have it.... I'd also like to know how equity infusions into Hulu by the current stock holders occurs. Can Disney out invest Comcast to increase its share (Or visa versa). With all the international content already locked up, is the focus on creating new content for distribution, and would Hulu be the best way to distribute it (Vs the new apps Disney will launch)....

Would love any new information / facts.

 

[Twilight_Roxas]

Now you know why everyone hates Comcast.

 

[bartholomr4]

From SEC.gov "Other Events 8-K Filing" for Comcast

In connection with credit presentations and consistent with the recently reaffirmed A- ratings, Comcast Corporation ("Comcast") is announcing its intention to pause its common stock repurchase program in 2019 to accelerate the reduction of indebtedness it will incur in connection with its acquisition of Sky plc. Comcast expects to complete $5.0 billion of repurchases in 2018.

 

[happycamperuni]

From SEC.gov "Other Events 8-K Filing" for Comcast

In connection with credit presentations and consistent with the recently reaffirmed A- ratings, Comcast Corporation ("Comcast") is announcing its intention to pause its common stock repurchase program in 2019 to accelerate the reduction of indebtedness it will incur in connection with its acquisition of Sky plc. Comcast expects to complete $5.0 billion of repurchases in 2018.

Makes a lot of sense, I think the pause should last at least 2 or 3 years if they're serious about investing in Sky.

Sky needs tens of billions in purchases of cable units to really become anything like a European Comcast. I don't see how they can do that if they're fully funding share repurchases and dividends.

 

[Indy_UK]

They certainly won't be turning SKY which uses satellite to cable like in the US. They'll probably just push their IP version

 

[LieutLaww]

SKY in the UK was already planning to go IP only in an upcoming update of the Box

 

[the.dreamfinder]

HAPPY FISCAL YEAR 2019 EVERYBODY!!

 

[bartholomr4]

They certainly won't be turning SKY which uses satellite to cable like in the US. They'll probably just push their IP version

I watched an interview with the CEO of Virgin Media, their biggest competitor, last week. (You could probably still see it on Bloomberg.com). He made a big deal about the speed of Virgin Media's broadband at 300+ bpm vs Sky at 75 bpm (or something close).... and Comcast's need to invest in the network....

 

[happycamperuni]

They certainly won't be turning SKY which uses satellite to cable like in the US. They'll probably just push their IP version

That was probably Disney's plan; there was speculation in FT that Disney might sell of Sky's UK cable operations (after separating it from the main satellite business) if possible.

Comcast might go a different route; given how Comcast itself was built, it probably makes more sense for Comcast to go all in on cable in UK/Germany/Austria/Italy/Spain by buying up massive amounts of cable units.

There's plenty of cable businesses in Europe valued in the $3-5 billion range that Comcast can look at if they want to merge Sky's satellite/OTT operations across Europe with cable offerings.

Of course, it'd probably cost Comcast around $40-50 billion over 10 years to acquire something like 20-25 million cable subscribers across Europe. That's expensive, but it would provide an easy way of dealing with the shift of Sky from satellite to IP/OTT. We'll see what their strategy is over the next couple of years.

 

[Rodan75]

So now we know that 'New Fox' will retain the Fox brand post spin-off. I suspect that means it is off the table for any of the remaining 21CF properties that will be part of 'New Disney'. I suspect they will keep FX branding but what will they do for the studios, keep 20Century no Fox? Or rename/rebrand the whole thing?

And it is good to see that Fox has started releasing official org leaders. That will start to help folks feel more confident in their futures as Disney starts doing the same.

 

[Sirwalterraleigh]

I find this scenario a little less likely. I can’t imagine that Disney will happily give up a DTCplay with 20M customers.

There’s that whole “we have a streaming thing coming and it’s gonna be awesome!”...with no evidence they have any idea how to do it...that iger spews at symposiums for the last 4 years as well...

 

[Sirwalterraleigh]

So now we know that 'New Fox' will retain the Fox brand post spin-off. I suspect that means it is off the table for any of the remaining 21CF properties that will be part of 'New Disney'. I suspect they will keep FX branding but what will they do for the studios, keep 20Century no Fox? Or rename/rebrand the whole thing?

And it is good to see that Fox has started releasing official org leaders. That will start to help folks feel more confident in their futures as Disney starts doing the same.

Why would disney - of all companies - want that?

That isn’t their market...thinking and with money is their pipeline.

 

[Rodan75]

Why would disney - of all companies - want that?

That isn’t their market...thinking and with money is their pipeline.

Not sure I understand your response?

 

[Rodan75]

There’s that whole “we have a streaming thing coming and it’s gonna be awesome!”...with no evidence they have any idea how to do it...that iger spews at symposiums for the last 4 years as well...

It sounds like they are touching on all of their sub-genre's of fans with the DTC offering. And they definitely have acquired the experience of running a DTC offering, plus they have Disney Life experience and Disney Now, ABC, ESPN+ etc experience as well. Not even including their experience with Hulu.

I think it is fair for them to feel confident in public about their experience in Streaming so far.

I think there are moments when your negativity about Iger veers into implausible. You can dislike his leadership, but he objectively has built experience in this space for Disney.

 

[Sirwalterraleigh]

It sounds like they are touching on all of their sub-genre's of fans with the DTC offering. And they definitely have acquired the experience of running a DTC offering, plus they have Disney Life experience and Disney Now, ABC, ESPN+ etc experience as well. Not even including their experience with Hulu.

I think it is fair for them to feel confident in public about their experience in Streaming so far.

I think there are moments when your negativity about Iger veers into implausible. You can dislike his leadership, but he objectively has built experience in this space for Disney.

None of those interfaces are as good as Netflix...Hulu is clunky as well.

Disneys best asset for steaming are the people at bammtech...just my opinion. They do great product for mlb and nhl