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News Disney and Fox come to terms -- announcement soon; huge IP acquisition
- Thread starter ohioguy
- Start date
Twilight_Roxas
Well-Known Member
This is why Comcast bully to get what they want.
Quinnmac000
Well-Known Member
happycamperuni
Active Member
The funny thing is that article is from 2016..., if you look at the points that the writer critiques him for, he was right on some of those counts.
'"ESPN now appears poised to become Disney's most troubled business as consumer behavior shifts rapidly." (Another analyst, Michael Nathanson, has called the Greenfield anti-ESPN line "hyperbolic drivel.")'
Who was right on that call in hindsight? Obviously Greenfield, not Nathanson.
ESPN's track record for subscriber losses and viewership declines over the last several years has been dismal, and there's no light at the end of that tunnel yet. We still have to see whether ESPN+ succeeds at making up for the cable losses.
As far as his track record on Disney, he's a Disney bear and a Netflix bull. He's issued buy ratings every 6-8 months on Netflix since the stock was in the $30s..., and now it's at $360. Obviously the past isn't the future, but he's been right on the big picture problems facing the traditional media industry as Netflix and the other tech giants have focused on taking the eyeballs for content for themselves.
Rodan75
Well-Known Member
I had never read that. But the article touches on so many of my concerns just by reading some of his stuff and coverage...
The fact that anyone gives him media attention any more is kinda amazing (from the linked article):
It is not unusual for a prognosticator and pundit and talking head to get things wrong. But the issue in Greenfield's case is his supposed status as "analyst." Rather than a man with a spreadsheet, he's a man with a world view. Asking Richard Greenfield his opinion about the cable bundle is rather like asking Donald Trump his opinion about immigration. It's a tautology.
Indeed, going through Greenfield's extensive and furious output of appearances and blog posts and tweets, it is hard to distinguish what he does from what I do. That is, Greenfield is far more recognizable as a journalist and columnist, developing an ongoing narrative reflecting personal idiosyncrasies and bias, than he is as a true securities analyst.
But then, as a journalist, he would have some troublesome issues, too: He uses his opinions to encourage people to do something he then makes money on — the more encouragement, the more money. The more publicity he gets, the more trades through his firm he causes, the more money he gets. In addition, he presumably sells access, taking clients of his firm out to meet the executives of companies that are pleased to open their doors to him, not least of all because he is their public advocate. Indeed, in courting such favor with rising companies, he can seem less an objective analyst or even enthusiastic journalist than tech posse member or even groupie — or PR guy. For a while, his social media picture had him in Google glasses.
Rodan75
Well-Known Member
Super confused by the stock prices today. $DIS is up and $CMCSA is down , I would have assumed the news that Comcast expects to start the bidding war on Wednesday would have hit Disney's stock. Unless investors are feeling more confident on Disney coming out of this situation as a winner (whether they compete or walk away) than they feel about Comcast.
I would also have expected Fox's stock to jump higher, but I guess much of the bidding war optimism is likely already baked in.
Random commentary - I used to think Spirit was Richfield, or at least someone close to Spirit. For awhile their Disney commentaries were a little too in sync.
I would also have expected Fox's stock to jump higher, but I guess much of the bidding war optimism is likely already baked in.
Random commentary - I used to think Spirit was Richfield, or at least someone close to Spirit. For awhile their Disney commentaries were a little too in sync.
happycamperuni
Active Member
I think everything is still too uncertain for Fox's shares to go much higher.
Right now, the Disney bid for Fox's assets values Fox at somewhere around $36-38. Each Fox shareholder gets around $28-29 of Disney stock along with a New Fox share that should be worth around $8-9 a share. That's the floor for Fox's stock, but nobody knows what's going to happen next week with the AT&T-TW merger which limits the upside. If AT&T-TW is prevented by the judge, then there's no way Comcast can bid for the Fox assets and the current Disney offer is the only possibility.
If Comcast makes an almost irrationally large offer, then Disney may just walk away in which case it makes sense that Disney's stock would have the uncertainty of the bidding war removed.
So yeah, I agree that investors are probably thinking that Disney won't make an irrational move here and may just choose to walk away if they can't get the Fox assets at a good price (i.e. near their current offer).
Comcast will go down if they make a bid over 60 a share. Disney would go down if they respond with a bid over 60 also. If Disney responded with a guarantee that on closing the stock value would be 60 a share for each Fox share with cash making up the difference Disney would not go down. Where it gets interesting is what happens if the AT&T merger is approved with lots of restrictions. Would Comcast still make an offer?
happycamperuni
Active Member
I think the maximum here is somewhere around $42-45 per Fox share (with the additional $8-9 of New Fox bringing the total value for Fox shareholders to around $50-54 a share).
The Fox assets are too dilutive if either Comcast or Disney pays more than that. I can't see either company's shareholders accepting that kind of dilution to their earnings/dividends/balance sheets.
I think Comcast and AT&T are only really concerned with forced asset sales. Restrictions such as arbitration agreements for other pay tv providers to access content and net neutrality agreements are probably acceptable to either. Anything that forces a sale of the most valuable assets (like Turner in the case of AT&T-TW or 60% of Hulu in the case of Comcast-Fox) are going to be unacceptable for either. Those are the most important assets that are trading hands...
I could see Comcast agreeing to sell some of the RSNs (though Disney may be forced to do as well given their current ownership of ESPN; the Fox RSNs are Disney's biggest anti-trust issue in this purchase).
I was talking about a top bid of 60 billion. A price of 40 a share would be 74 billion or so and I would walk away from that if I were Disney with the 1.5 billion and buy SeaWorld for 2 billion and buy another Studio.
the.dreamfinder
Well-Known Member
Show of hands, do you think Comcast will pursue the 61% outstanding share of Sky Plc regardless of outcome (eg, TW-ATT doesn’t get approved and neither Fox deal works out)?
Stripes
Premium Member
Definitely. I think Comcast has a much higher likelihood of nabbing Sky, while Disney is the clear favorite for Fox.
Quinnmac000
Well-Known Member
100% its a content creator and a distributor with already built up infrastructure and a successful OTT program already which allows it to compete with others in European Market.
happycamperuni
Active Member
Yeah, in that case if Comcast isn't going to get Fox, then they can overpay for that 61% of Sky (i.e. they can offer something ridiculous like $20+ billion for just that 61% of outstanding shares).
Then I think we'd see a swap of Comcast's 30% of Hulu for Disney's 39% of Sky (with a couple billion in cash added to Comcast's 30% Hulu stake to make the trade equal).
A swap like that would be beneficial to both.
Rodan75
Well-Known Member
I really think that is the only reason neither Disney nor Fox have matched Comcast’s SKY offer.
Stripes
Premium Member
Herbert Hovenkamp a Wharton professor and the "dean of American antitrust law" believes the DOJ has successfully made their case against AT&T-Time Warner.
https://nypost.com/2018/05/28/antitrust-professor-att-time-warner-merger-is-in-trouble/
As I've said, this case is nowhere near as clean as the media has portrayed.
Edit: I listened to a podcast he was on speaking about the merger. Let me tell you, he knows his stuff.
https://nypost.com/2018/05/28/antitrust-professor-att-time-warner-merger-is-in-trouble/
As I've said, this case is nowhere near as clean as the media has portrayed.
Edit: I listened to a podcast he was on speaking about the merger. Let me tell you, he knows his stuff.
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Twilight_Roxas
Well-Known Member
That means Comcast loses the war. I hope.
Quinnmac000
Well-Known Member
It doesn't matter because Disney can't do anything as minority shareholder as long as Comcast does their fiduciary duties