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

[Sirwalterraleigh]

I had assumed OLC was always on Disney's radar at some point. I think the success they are seeing in Paris (yes, after letting it purposefully wither) may inspire them to be more aggressive in their ownership stakes.

They could re-focus on IP acquisition and go after (Mattel? Hasbro?) or they could go another route and go after both Sony Entertainment and Sony Interactive? EA? Although I'm not sure if any of those give the global reach they were targeting with Fox.

Toy companies are not doing well and toys r us really put them in a bind. Kids don’t really play with actual toys anymore - it seems.

Sony would be interesting...

But I think what this means is Comcast is committed to block - damn the torpedoes - and this was igers one chance at that last big deal.

The current acquisition period is over.

 

[pdude81]

Could it be that Comcast knows they can only afford to acquire one or the other, but by driving the price up on both they will at least get one of the deals done?

 

[Rodan75]

Toy companies are not doing well and toys r us really put them in a bind. Kids don’t really play with actual toys anymore - it seems.

Sony would be interesting...

But I think what this means is Comcast is committed to block - damn the torpedoes - and this was igers one chance at that last big deal.

The current acquisition period is over.

Well...it wouldn't be for the Toys. Hasbro itself has been or has already gotten out of most of their toy manufacturing business, it is all/mostly outsourced. They are trying to become a more pure IP play with their brands.

I agree that I think you are right, this means that Comcast is committing to blocking Disney purchase of all of the Fox assets up for grabs. I'm not sure if this means Comcast will get what Disney was getting, or if Fox will sell components to the highest bidder.

 

[Rodan75]

Could it be that Comcast knows they can only afford to acquire one or the other, but by driving the price up on both they will at least get one of the deals done?

That was my original thought, as well. And I'm assuming it was Disney's assumption, which is why we haven't seen a competing SKY offer from them.

 

[pdude81]

That was my original thought, as well. And I'm assuming it was Disney's assumption, which is why we haven't seen a competing SKY offer from them.

They would be best off waiting until the Fox decision at this point to see if Fox decides to up the offer against Comcast or if they are required to bid themselves if Fox is blocked. They might be able to choose whether they want to fight the war on one front or two.

 

[CaptainAmerica]

I think this deal ultimately was about gaining control of Hulu...the content was a bonus.
Disney needs a steaming platform and they are downright awful at tech development.

As far as “how far they will go?” Under Eisner - specifically Capitol cities - he wouldn’t be denied...Iger has faired better from a value perspective.

But Comcast provides Internet service...and that’s why they have a leg up on Disney in this scenario. Unlike cable tv - that’s not going anywhere...it will only intensify and they can hedge debt much more effectively than Disney.

The regulators won't let Comcast exercise managerial control over Hulu. That was one of the stipulations when they acquired NBCU in the first place. You can't have the broadband provider, the cable company, and the OTT company all under the same control.

 

[pdude81]

The regulators won't let Comcast exercise managerial control over Hulu. That was one of the stipulations when they acquired NBCU in the first place. You can't have the broadband provider, the cable company, and the OTT company all under the same control.

Silly Comcast should have gotten into the oil business.

 

[Sirwalterraleigh]

The regulators won't let Comcast exercise managerial control over Hulu. That was one of the stipulations when they acquired NBCU in the first place. You can't have the broadband provider, the cable company, and the OTT company all under the same control.

Correct...but that isn’t stopping Comcast from blocking Disney’s path to it...

 

[Indy_UK]

If Comcast want to just throw money and hope it sticks, let them have SKY and Fox then go bankrupt in the long term because of the sheer amount of debt.

 

[CaptainAmerica]

Correct...but that isn’t stopping Comcast from blocking Disney’s path to it...

Still. "Regulatory risk" is exponentially higher at Comcast than at Disney, which is why I think the Disney acquisition ultimately goes through despite a lower price-per-share.

 

[pdude81]

I don't think Disney can really afford to lose this Fox deal unless Comcast goes to some astronomical number. After all those acquisitions and park spending, Comcast would then assume ownership of the Avatar films, additional Marvel rights, and the distribution for SW:E4 if they get Fox. Next thing we know, Lasseter will be running Dreamworks animation

 

[Sirwalterraleigh]

Still. "Regulatory risk" is exponentially higher at Comcast than at Disney, which is why I think the Disney acquisition ultimately goes through despite a lower price-per-share.

Don’t see it...the money will win. Comcast might have to “spin off” what compromises the deal...but it still would get done.

Remember that “anti trust” changes by the day or based on who is looking at it and what they had for breakfast. It really no longer exists.

 

[mikejs78]

Oh I’m not saying it’s wise...i’m Saying they have more flexibility/sell it to Wall Street.

Even though it’s a nightmare...providing service guarantees monthly bills to the masses...something disney wouldn’t delve into because of the overhead.

But you can sell it to Wall Street.

Comcast sucks...everybody pays every month.

Yeah but that's dropping much like ESPN is dropping. Cable TV distribution is a declining business.

 

[Rodan75]

They would be best off waiting until the Fox decision at this point to see if Fox decides to up the offer against Comcast or if they are required to bid themselves if Fox is blocked. They might be able to choose whether they want to fight the war on one front or two.

I believe that Disney/Fox only have a couple of weeks to counter. It appears that Comcast is going to sail through regulatory approval for both the UK and EU, so I would imagine they have to propose a counter offer before 6/15 when the EU report is expected. Fox is already received a 'no' (I believe it was an informal no, but I really don't understand the messaging path for UK and EU regulatory so that is still a concern), so it doesn't make sense for SKY to accept another bid from them.

Again, this could be the biggest game of chicken ever, maybe Comcast is messaging a Fox bid to keep them for countering for SKY.

Sky and Star India and the Regional Sports Nets are likely the only things that Comcast wants from Fox. I could see Disney giving up SKY but not Star India or the RSNs.

 

[happycamperuni]

Neither Comcast nor Disney can easily afford to lose the Fox assets because there isn't another set of assets like it.

Comcast's NBCUniversal and Disney's media assets are both subscale in a world with Netflix, Amazon Prime, Facebook, and Youtube.

What do the latter tech companies have that the former don't? Worldwide scale. Netflix, Amazon Prime, Facebook, and Youtube have subscribers/users in most countries and have access to markets that target nearly everybody (except China).

NBCU and Disney don't have that kind of scale; they really only target media consumption overseas through film. But that's nowhere near competitive in a world where the tech companies are able to deliver media content online to everybody.

That's why Sky and Star India are such important parts of this deal; with them, you get scale across Europe and India, the two most important markets outside of North America.

 

[CaptainAmerica]

Neither Comcast nor Disney can easily afford to lose the Fox assets because there isn't another set of assets like it.

Comcast's NBCUniversal and Disney's media assets are both subscale in a world with Netflix, Amazon Prime, Facebook, and Youtube.

What do the latter tech companies have that the former don't? Worldwide scale. Netflix, Amazon Prime, Facebook, and Youtube have subscribers/users in most countries and have access to markets that target nearly everybody (except China).

NBCU and Disney don't have that kind of scale; they really only target media consumption overseas through film. But that's nowhere near competitive in a world where the tech companies are able to deliver media content online to everybody.

That's why Sky and Star India are such important parts of this deal; with them, you get scale across Europe and India, the two most important markets outside of North America.

BAMTech is supposed to solve the scale issue. I think the content is much more important than the distribution.

 

[Indy_UK]

This bidding war certainly isn’t over Hulu. You can start a streaming service like Disney is doing with BAM tech for a fraction of the amounts that’s being thrown around.

 

[Crossfire]

People really thinking Iger is going to give up on Fox content that easily? lol

 

[happycamperuni]

BAMTech is supposed to solve the scale issue. I think the content is much more important than the distribution.

Sort of, Disney doesn't have enough overseas targeted content. NBCU certainly doesn't.

Even with the strength of Marvel/Star Wars, it'll be hard to sell the Disney streaming services overseas without targeted content. Could they develop it organically? Sure, but that's really hard to do in a world where you're very late to the game.

Netflix has put a lot of groundwork into developing series that target Europe/Asia etc. Amazon tied Prime to their delivery service and has done work targeting specific series that play well overseas (Grand Tour, the upcoming LOTR series). But they were first movers, they already have tens of millions of subscribers across Europe and Asia. It's a lot easier to do as the first or second service than as the tenth or eleventh (including local services).

The reason that Sky and Star India are important is they'll tie into streaming services/OTT services targeting Europe/India. Both also have a lot of sports content that would go a long way towards enabling Disney to sell ESPN+ overseas.

 

[Sirwalterraleigh]

Yeah but that's dropping much like ESPN is dropping. Cable TV distribution is a declining business.

It is...but data service isn’t going anywhere. And the death of net neutrality is a windfall to the comcasts of the world.

Disney has no “backup” to espn like Comcast does to selling lifetime subscriptions