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

[marni1971]

Let us know when you can.

This might be something you can't answer, but is this a certainty already? If not what would you say the odds are?

Nothing more I should say for now aside from it’s already begun.

 

[gmajew]

Probably need to see where this all leads; if this is the final bid, then it's probably going to be cash flow changes at the margins (i.e. several hundred million shifted from investment funding to debt payments over the next decade).

But if there's still another higher set of bids, then it could be a more dramatic change. Either way, an extra $35 billion in debt changes investment strategies for sure.

Yes they are taking on extra debt to make this deal but you have got to assume like any business you buy that the company you are buying is able to support the debit you are bringing on. So if they are expecting to increase debit service any good CFO would make sure that the assets they are buying can and will generate enough cash flow to pay for the debit. If you are buying based on the future earning then you dont pay as high a premium for the assets.

My fear is that is why the originally offered stock only as they did not cover the profit stream and current debit the company had.

 

[smile]

Yes.

I’ve heard the same.

how could it not?

as an advocate of the themed entertainment industry, these machinations fill me with great unease

 

[the.dreamfinder]

 

[tribbleorlfl]

Comcast still wins -- if they couldn't buy Fox, they at least made Disney pay about $20 billion more for it.

How many parks could have been built / movies been made / broadway shows produced / sports teams been bought for $20 billion dollars?

Yeah, this is definitely a Dave Hester "Storage Wars" moment.

 

[the.dreamfinder]

 

[Indy_UK]

Personally I don’t buy why the parks then have to take a hit. Everyone knows they have been cutting back at the parks and raising prices for ages. Why is it the parks that always have to be brought up as an area that will get cut backs.

If the Disney, Marvel, Pixar and star wars movies are performing so well at the box office then why don’t they foot the bill to buy Fox? Why has it got to be park cutbacks?

 

[happycamperuni]

Yes they are taking on extra debt to make this deal but you have got to assume like any business you buy that the company you are buying is able to support the debit you are bringing on. So if they are expecting to increase debit service any good CFO would make sure that the assets they are buying can and will generate enough cash flow to pay for the debit. If you are buying based on the future earning then you dont pay as high a premium for the assets.

My fear is that is why the originally offered stock only as they did not cover the profit stream and current debit the company had.

At this point, that's not the case.

Somebody is probably going to overpay for the assets and end up needing to dip into their current operations' projected cash flows to pay down the debts from the deal over a 5-10 year horizon.

We're really way beyond a reasonable price.

 

[tribbleorlfl]

As much as I want Disney to just have the rights for F4 and X-Men already, this is an obscene amount of money.

Plus, full control of the OT and PT SW films. Sure, now we're almost assured 4K unaltered versions of the original films, but at what cost? 70+ billion.

 

[Princess Leia]

Plus, full control of the OT and PT SW films. Sure, now we're almost assured 4K unaltered versions of the original films, but at what cost? 70+ billion.

I might be wrong about this, but I think the only original film that Fox still had complete control over was A New Hope. Now it's Disney's (because I highly doubt Comcast will counteroffer), but $72B is just way too much.

 

[HauntedPirate]

I might be wrong about this, but I think the only original film that Fox still had complete control over was A New Hope. Now it's Disney's (because I highly doubt Comcast will counteroffer), but $72B is just way too much.

I fully expect Comcast to throw out a final offer of $80B, the number I read initially they could go up to right now. The ball will then be in Iger's court once again - Will he bail or increase the numbers on the check they write for Fox?

The comment by @marni1971 about "it's already begun" makes you think, "What things park-related could already have been affected by Disney's offer for Fox?". Let the speculation commence.

#thanksFox

 

[Rodan75]

But then wouldn't the studio that's trying to find a bidder be worth less? It's dangerous to try to sell the tires before the rest of your sports car for a small (additional) profit

Did we ever get a clear understanding if Marvel had the right to reclaim the Fox Marvel rights under a Change of Control? Given the FF and Spider-Man rights issues in the 80-90's I wouldn't be surprised if that was one stipulation that Marvel may have added. But I don't think anyone outside of Fox and Disney know for sure.

 

[Rodan75]

Don’t be too sure. Obviously I can’t go into specifics.

That is interesting considering how much P&R has been adding to Disney's current success. But I am assuming Chapek is volunteering additional 'synergies' so that he looks good for the top job.

 

[happycamperuni]

Comcast should be countering any minute now.

 

[Bender123]

Did we ever get a clear understanding if Marvel had the right to reclaim the Fox Marvel rights under a Change of Control? Given the FF and Spider-Man rights issues in the 80-90's I wouldn't be surprised if that was one stipulation that added. But I don't think anyone outside of Fox and Disney know for sure.

Oddly...Fox doesn't actually own the creative rights to F4, they only own the distribution rights. Remember the Roger Cormen 1990's film? Neither does anybody else, but it existed solely to keep the rights for a company called Constantine Entertainment, who is most known for dubbing old western and kung fu movies into German. They licensed their rights to Fox in exchange for a portion of the Box office. They are still technically the owners of the franchise and that ownership would not change hands with a Fox sale...only the license.

This company seems to only exist to live off a few licenses film properties.

https://www.imdb.com/title/tt1502712/companycredits

 

[Princess Leia]

I fully expect Comcast to throw out a final offer of $80B, the number I read initially they could go up to right now. The ball will then be in Iger's court once again - Will he bail or increase the numbers on the check they write for Fox?

The comment by @marni1971 about "it's already begun" makes you think, "What things park-related could already have been affected by Disney's offer for Fox?". Let the speculation commence.

#thanksFox

Probably anything that was Blue Sky or a little further along for Epcot, DHS, and AK. So probably Coco. Possibly Poppins. Maybe the plan to get the Shanghai Pirates boat tech into one of the Florida parks.

 

[Disneyhead'71]

And Comcast counters with $80B.

 

[Indy_UK]

OK, wow $80 billion, yeah I'd let Comcast have Fox now. They're not worth that.

They could probably buy a ton of smaller companies for much less. Saying that, I think Disney will bid one more time

 

[Rodan75]

And Comcast counters with $80B.

Doesn't look like this has actually happened yet, just that it is expected that Comcast will counter.

 

[seascape]

Comcast should be countering any minute now.

I don't think Comcasts offer of 41.00 is enough but this is a war and it looks like they are over paying. Remember besides the 41.00 a share they are paying 1.5. Billion breakup fee to Disney. 76.14 billion plus 1.5 billion breakup fee and 14 billion in Fox debt. Total debt 91.64 billion. Add Sky and its 114.64 billion and balls back in Disney's court to offer more. This is crazy.