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

bartholomr4

Well-Known Member
https://variety.com/2019/biz/news/fox-disney-regional-sports-networks-bid-1203105421/

Fox Confirms It Won’t Bid on Disney’s Regional Sports Networks
By Cynthia Littleton

The new-model Fox Corp. will not be a bidder in the auction of the 22 regional sports networks that Disney is set to buy from 21st Century Fox.

Fox confirmed in a Securities and Exchange Commission filing Friday that it “does not intend” to make a run at any of the RSNs about to change hands. The Disney-21st Century Fox transaction is expected to close by early March. Disney has to sell the local cablers to comply with the terms of the agreement it reached last year with the Justice Department clearing the way for the $71.3 billion transaction.

There’d been speculation that the new Fox set to emerge after the Disney deal is done would try to buy back those 22 outlets. The RSNs were valued at about $20 billion in the terms of the Disney-21st Century Fox transaction. It’s still unclear how robust the market is for Disney’s mandated sale process. RSNs have become a lightning rod in the pay-TV arena because they command high per subscriber fees, driving up MVPD bills. But long-term there’s also concern about whether RSNs will be able to hang on to local sports rights as deep-pocketed digital giants barrel into the premium video business.
 

brodie999

Active Member
Advertisement
https://variety.com/2019/biz/news/fox-disney-regional-sports-networks-bid-1203105421/

Fox Confirms It Won’t Bid on Disney’s Regional Sports Networks
By Cynthia Littleton

The new-model Fox Corp. will not be a bidder in the auction of the 22 regional sports networks that Disney is set to buy from 21st Century Fox.

Fox confirmed in a Securities and Exchange Commission filing Friday that it “does not intend” to make a run at any of the RSNs about to change hands. The Disney-21st Century Fox transaction is expected to close by early March. Disney has to sell the local cablers to comply with the terms of the agreement it reached last year with the Justice Department clearing the way for the $71.3 billion transaction.

There’d been speculation that the new Fox set to emerge after the Disney deal is done would try to buy back those 22 outlets. The RSNs were valued at about $20 billion in the terms of the Disney-21st Century Fox transaction. It’s still unclear how robust the market is for Disney’s mandated sale process. RSNs have become a lightning rod in the pay-TV arena because they command high per subscriber fees, driving up MVPD bills. But long-term there’s also concern about whether RSNs will be able to hang on to local sports rights as deep-pocketed digital giants barrel into the premium video business.
Man, the deal really is taking a long time to be finalised. By the way, could someone please give us a list of which countries approved the deal and which haven't yet? It's always good to keep the list updated.
 

AnotherDayAnotherDollar

Well-Known Member

MisterPenguin

Rumormonger
Premium Member
Disney buy Comcast out of Hulu? While that sounds like the best thing in the world for Disney, they could just rely on the Hulu contract that forces NBC to supply content for Hulu so that NBC's streamer's content will be diluted, and not because NBC wants to license their content out but because they have to feed Hulu which they part-own.
 

brodie999

Active Member
Disney buy Comcast out of Hulu? While that sounds like the best thing in the world for Disney, they could just rely on the Hulu contract that forces NBC to supply content for Hulu so that NBC's streamer's content will be diluted, and not because NBC wants to license their content out but because they have to feed Hulu which they part-own.
Agreed. And in order to buy Comcast/Universal, they'd have to navigate the laws and convince regulators they need the next 30% control of Hulu and the only way to make another MCU Incredible Hulk movie is to let them buy out the distribution rights to the character which Universal still owns.
 

seascape

Well-Known Member
Agreed. And in order to buy Comcast/Universal, they'd have to navigate the laws and convince regulators they need the next 30% control of Hulu and the only way to make another MCU Incredible Hulk movie is to let them buy out the distribution rights to the character which Universal still owns.
Back in December 2017 no one would have predicted Hulu would have over 25 million subscribers. In fact many people thought Netflix owned the market with little chance of Hulu ever making a profit. Now just 14 months later and in my opinion because of all the Disney Fox merger publicly and Iger's input Hulu now will be highly profitable by 2021. So Universal may decide it's in their interest in keeping their 30%. Hulu needed a majority owner to force it onto the right track and Netflix made a major mistake dropped their Marvel shows leaving them to Hulu. It was actually the Marvel Shows on Netflix that made me subscribe to Hulu and now I will be dropping Netflix.
 

Rodan75

Well-Known Member
Back in December 2017 no one would have predicted Hulu would have over 25 million subscribers. In fact many people thought Netflix owned the market with little chance of Hulu ever making a profit. Now just 14 months later and in my opinion because of all the Disney Fox merger publicly and Iger's input Hulu now will be highly profitable by 2021. So Universal may decide it's in their interest in keeping their 30%. Hulu needed a majority owner to force it onto the right track and Netflix made a major mistake dropped their Marvel shows leaving them to Hulu. It was actually the Marvel Shows on Netflix that made me subscribe to Hulu and now I will be dropping Netflix.
I think at some point it becomes counterproductive for Disney, AT&T and Comcast to continue to work together on Hulu. AT&T and Comcast will have competing content destinations with much of the same content they are licensing to Hulu. It would make more sense for both to sell to Disney between now and 2020. It is in Comcast's best interest though to stay a part of Hulu for as long as possible to get that competitive insight.

Also with Comcast doing this NBCU streaming service, I wonder if that changes the calculus on how Disney is treating ESPN in regard to Streaming vs. Cable content. I think that is an interesting development.
 

bartholomr4

Well-Known Member
I think at some point it becomes counterproductive for Disney, AT&T and Comcast to continue to work together on Hulu. AT&T and Comcast will have competing content destinations with much of the same content they are licensing to Hulu. It would make more sense for both to sell to Disney between now and 2020. It is in Comcast's best interest though to stay a part of Hulu for as long as possible to get that competitive insight.

Also with Comcast doing this NBCU streaming service, I wonder if that changes the calculus on how Disney is treating ESPN in regard to Streaming vs. Cable content. I think that is an interesting development.
We will know if Comcast really wants their 30% of Hulu, once Disney starts to spend more on Marketing and International Expansion (which will require investment above the amount of profit Hulu is generating). If Disney puts the money in, and Comcast and/or AT&T (both in heavy debt) fail to invest, then Disney’s control (and resulting equity) will rise..... I am waiting to see the 4th Quarter and 1st Quarter 10K’s to see if Comcast/AT&T continue to invest....... If they are not, then their hand will be tipped.... If however, ifthe annual “true-up” payments are made, then I would surmise no sale will result any time soon. I would love to be a fly on the wall in the Hulu Board meetings...
 

Quinnmac000

Well-Known Member
Comcast literally said in the press reslease they planned to keep their stake in Hulu.

Additionally the service will be free to comcast subscribers so it’s not a money making service. It’s more for retention
 

Rodan75

Well-Known Member
Comcast literally said in the press reslease they planned to keep their stake in Hulu.

Additionally the service will be free to comcast subscribers so it’s not a money making service. It’s more for retention
Yes. But it is also ad supported. Like Hulu. But also for sale to non-cable subs. There will be original content, like Hulu. They plan to offer the service internationally, like Hulu. And they plan to give cable subs access. Like their TV Everywhere service (which opens some interesting options for ESPN.

This is definitely a for profit service that will directly compete with Hulu.
 

Quinnmac000

Well-Known Member
Yes. But it is also ad supported. Like Hulu. But also for sale to non-cable subs. There will be original content, like Hulu. They plan to offer the service internationally, like Hulu. And they plan to give cable subs access. Like their TV Everywhere service (which opens some interesting options for ESPN.

This is definitely a for profit service that will directly compete with Hulu.
Steve Burke stated later it will also be provided to Charter and DirectTV consumers and those outside the pay-tv network will those that would pay a fee to use.

Again if all cable users get it for free...it’s not gonna make money. It’s a retention tool.

And as stated and iterated by Comcast leadership
At the same time it builds out a new streaming organization under the leadership of longtime cable guru Bonnie Hammer, NBCU will continue to play the long game with Hulu, Burke confirmed. As one of the original content partners behind the 12-year-old streaming service, NBC has a 30% stake in it. Once Disney closes its $71.3 billion deal to acquire most of 21st Century Fox, Disney will control 60% of Hulu. But Bob Iger and his team see Hulu as one of the three pillars of Disney’s streaming strategy, along with ESPN+ and Disney+. Even as a minority owner of Hulu, NBCU has seats on its board, data from its 25 million subscribers to be gleaned and a financial profit motive to stay invested. True, Hulu loses money (about $1.5 billion last year), but the asset is estimated to be worth $5 billion.
 

bartholomr4

Well-Known Member
Steve Burke stated later it will also be provided to Charter and DirectTV consumers and those outside the pay-tv network will those that would pay a fee to use.

Again if all cable users get it for free...it’s not gonna make money. It’s a retention tool.

And as stated and iterated by Comcast leadership
Just for Grin's, lets agree that Disney and it's 60% will drive the expansion strategy. Currently Disney = 60%, Comcast = 30% and AT&T = 10%. Using the numbers above, that put's Disney's Equity value at 3 Billion, Comcast at 1.5 Billion, and AT&T at .5 Billion. Again for Grins, lets say Disney wants to spend 3.5 Billion on Expansion. That will increase the yearly loss to $5 billion. My question is would Comcast and AT&T Cover that $5.0 Billion or just stay pat?

Again, for Grins, lets say they don't participate. Using a little math, Disney's equity would rise to 84.6%, Comcast would Fall to 11.5% and AT&T to 3.8%. I know Comcast has said they want to "Play the Long Game" with Hulu, but the cost of playing along makes it harder for Comcast to reduce its Post Sky Acquisition debt level, (Same with AT&T and Time Warner). In game theory there are signal's sent, and the comment above is what I would say too..... Not sure it is what I would do if I were Comcast, as the money I put up for my major competitor to spend, will make that competitor stronger, not weaker.... as for the data on the 25 million subscribers, I would argue Comcast already has access to that data, and the benefit of "Playing the Long Game" is not greater than the cost to stay in the game.....

For me, I am folding and going to a different card table.....
 

AnotherDayAnotherDollar

Well-Known Member
Just for Grin's, lets agree that Disney and it's 60% will drive the expansion strategy. Currently Disney = 60%, Comcast = 30% and AT&T = 10%. Using the numbers above, that put's Disney's Equity value at 3 Billion, Comcast at 1.5 Billion, and AT&T at .5 Billion. Again for Grins, lets say Disney wants to spend 3.5 Billion on Expansion. That will increase the yearly loss to $5 billion. My question is would Comcast and AT&T Cover that $5.0 Billion or just stay pat?

Again, for Grins, lets say they don't participate. Using a little math, Disney's equity would rise to 84.6%, Comcast would Fall to 11.5% and AT&T to 3.8%. I know Comcast has said they want to "Play the Long Game" with Hulu, but the cost of playing along makes it harder for Comcast to reduce its Post Sky Acquisition debt level, (Same with AT&T and Time Warner). In game theory there are signal's sent, and the comment above is what I would say too..... Not sure it is what I would do if I were Comcast, as the money I put up for my major competitor to spend, will make that competitor stronger, not weaker.... as for the data on the 25 million subscribers, I would argue Comcast already has access to that data, and the benefit of "Playing the Long Game" is not greater than the cost to stay in the game.....

For me, I am folding and going to a different card table.....
Are you sure that's how Hulu's equity works? That opens the possibility of equity being changed every year. So let's say your scenario plays out. Then the next 2 years the same thing happens and now Disney owns 99% of the entity. And then Hulu is profitable and Comcast and ATT want higher stakes so they each put in 10x as much as Disney, so now Disney ownership goes down to 50%? This is a little confusing to me.
 

Rodan75

Well-Known Member
Just for Grin's, lets agree that Disney and it's 60% will drive the expansion strategy. Currently Disney = 60%, Comcast = 30% and AT&T = 10%. Using the numbers above, that put's Disney's Equity value at 3 Billion, Comcast at 1.5 Billion, and AT&T at .5 Billion. Again for Grins, lets say Disney wants to spend 3.5 Billion on Expansion. That will increase the yearly loss to $5 billion. My question is would Comcast and AT&T Cover that $5.0 Billion or just stay pat?

Again, for Grins, lets say they don't participate. Using a little math, Disney's equity would rise to 84.6%, Comcast would Fall to 11.5% and AT&T to 3.8%. I know Comcast has said they want to "Play the Long Game" with Hulu, but the cost of playing along makes it harder for Comcast to reduce its Post Sky Acquisition debt level, (Same with AT&T and Time Warner). In game theory there are signal's sent, and the comment above is what I would say too..... Not sure it is what I would do if I were Comcast, as the money I put up for my major competitor to spend, will make that competitor stronger, not weaker.... as for the data on the 25 million subscribers, I would argue Comcast already has access to that data, and the benefit of "Playing the Long Game" is not greater than the cost to stay in the game.....

For me, I am folding and going to a different card table.....
So I don't think it would work this way. AT&T gets less say since they aren't a charter member of the Hulu board, but Comcast is. So they could veto the expansion and enable the Comcast product the ability to expand internationally first. My thought process is either Comcast agrees to sell, goes back to being a non-voting member of the board or Hulu dies, or everyone agrees to sell it to a 3rd party.

I don't believe that Disney buys the AT&T stake unless they can get Comcast to budge. And I don't think anyone should believe Comcast when they say they plan to keep their Hulu stake, clearly that will not be possible over the long term.
 

Rodan75

Well-Known Member
Steve Burke stated later it will also be provided to Charter and DirectTV consumers and those outside the pay-tv network will those that would pay a fee to use.

Again if all cable users get it for free...it’s not gonna make money. It’s a retention tool.

And as stated and iterated by Comcast leadership
Burke's statements yesterday, seem to indicate they are very early into their thoughts on this Service. I agree it is partially a retention tool, but offers the flexibility to sell to other users which does put it into direct competition with Hulu. (Early in the day it was that all NBC Subscribers would get the service for Free, which would be all Cable and Sat Subs, instead of Xfinity or SKY Subs)

No way that Comcast can maintain their charter voting rights with Hulu and manage a competitor.
 

Rodan75

Well-Known Member
It looks like there may be a RSNs spinoff like I wanted. According to the NY Post the Feds may agree to it. https://www.google.com/amp/s/nypost.com/2019/01/14/doj-may-allow-disney-to-spin-off-of-foxs-regional-sports-networks/amp/
I agree with the thought process, but I think the NYP described the biggest issue with the concept, they lose the clout they had with Fox to enforce carriage. It is a big asset to let waste away, which is what I think would happen in a spin-off.
 

AnotherDayAnotherDollar

Well-Known Member
So I don't think it would work this way. AT&T gets less say since they aren't a charter member of the Hulu board, but Comcast is. So they could veto the expansion and enable the Comcast product the ability to expand internationally first. My thought process is either Comcast agrees to sell, goes back to being a non-voting member of the board or Hulu dies, or everyone agrees to sell it to a 3rd party.

I don't believe that Disney buys the AT&T stake unless they can get Comcast to budge. And I don't think anyone should believe Comcast when they say they plan to keep their Hulu stake, clearly that will not be possible over the long term.
https://variety.com/2019/tv/news/nbcuniversal-streaming-service-steve-burke-1203107638/

Among the many questions raised by NBCU’s OTT plans is the fate of Comcast’s 30% interest in Hulu. NBCU’s service in many ways will duplicate Hulu’s offering. Hulu’s ownership picture is already changing with Disney’s pending acquisition of 21st Century Fox — a mammoth deal driven by Disney’s desire to build a global streaming platform to compete with Netflix. Disney is expected to try to buy out Comcast’s Hulu stake, but Burke indicated that Comcast was in no rush to sell.

“Fifty years from now will we be in Hulu? No, I don’t think we will. But I don’t think we’ll sell in five minutes,” Burke said. “Disney would like to buy us out. I don’t think anything’s going to happen in the near term. (NBCU’s service) will be one of many and it’s going to be as competitive with Netflix and Amazon and Hulu as anyone else.”
They (like AT&T) are definitely open to selling, but they know Disney wants to buy. It's a matter of sitting down and coming up with a fair market value. That is the challenge and the question (if they can sit down and do it). Furthermore, I think Disney would want those Marvel rights bundled in from Comcast as well. A deal may never be reached, but hearing from execs from DIS, CMCSA, and T one can see all 3 parties are willing to deal with the former buying the latter 2 from the venture. Whether or not it'll happen remains to be seen. The only thing bigger than these execs bank accounts is their egos.

For these companies short term and long term is very subjective. On the newer Disney movies on Netflix Iger said that "they have a window of exclusivity that expires and then they have access to that content non exclusively for quite a long time after that" or something of that nature. We now know the content gets removed from Netflix 18 months after they were released there. The non exclusive period is likely to be 6-9 months (with a 9-12 months exclusive period).

On CMCSA's DTC app, it's both a retention tool and a for profit service. They'll sell it to non Comcast consumers and I doubt they will be giving that away to show how awesome Xfinity is.
 
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