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

[Sirwalterraleigh]

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

$100 billion is “giving up easily”?

Iger has negotiated “small time” deals to this point. 2 of which weren’t realistically going anywhere else. This is different.

 

[Sirwalterraleigh]

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.

They are awful at tech...always have been.

Bammtech is a good piece, however.

If Disney were to acquire 60% of Hulu...they can feasibly do what they want with it...call it “magic tv”, expand it, and charge the competitor studios a fortune. And fight Netflix out of existence...all that is on the table.

Obviously the content and sky are huge parts of the deal too...but sometimes it’s the “thrown in player” that ends up in the hall of fame out of a deal.

 

[VJ]

I love watching this unfold. It's really interesting and somewhat exciting to watch the war between companies play out.

 

[Sirwalterraleigh]

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

That’s a tough case to make when Disney has never even attempted distribution.
Bammtech so far has sold hockey and baseball to willing out of market fans like me only...pretty big jump.

 

[pdude81]

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.

I can see why Comcast would want to rush into this takeover, but I think all that the board at Sky did was to pull back from their recommendation that they accept the deal from Fox. It would be in Sky's best interest to wait until the middle of June to see what counter if any was given by Fox or Disney, given that they've been waiting a year and a half already. This is an odd and dangerous game by Comcast because they would likely have to pay a lot more for these two companies separately than they would if they bought the combined Fox/Sky or if Fox was blocked and they could have saved a few billion buying the company themselves.

The dual war only makes sense to me in two cases.
1. They don't really think they can get both and want to try to drive up the cost of acquiring Fox for Disney.
2. They would have easy approval for adding Sky and additional revenue while waiting to see if approved for a Fox takeover..

 

[Rodan75]

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.

No matter what Disney will have to increase their offer to get a deal done. Maybe they add cash to prevent the Murdochs from getting too much stake in Disney.

 

[CaptainAmerica]

That’s a tough case to make when Disney has never even attempted distribution.
Bammtech so far has sold hockey and baseball to willing out of market fans like me only...pretty big jump.

BAMTech runs HBO's digital distribution. Pumping out an episode of Game of Thrones is about as big as it gets in the content distribution space.

 

[Rodan75]

BAMTech runs HBO's digital distribution. Pumping out an episode of Game of Thrones is about as big as it gets in the content distribution space.

I really think folks forget how big of a deal it was that Disney acquired controlling stake in BAMTech.

 

[Sirwalterraleigh]

BAMTech runs HBO's digital distribution. Pumping out an episode of Game of Thrones is about as big as it gets in the content distribution space.

Well...hbo’s stream sucks...but that is a good step towards content distribution

 

[Sirwalterraleigh]

I really think folks forget how big of a deal it was that Disney acquired controlling stake in BAMTech.

Not at all...that is the best tech acquisition they’ve ever made...but still a ways to go

 

[Sirwalterraleigh]

No matter what Disney will have to increase their offer to get a deal done. Maybe they add cash to prevent the Murdochs from getting too much stake in Disney.

The Murdochs getting control of Disney would be the end...

So yeah, not an option there

 

[HauntedMansionFLA]

Still having trouble with the idea that an MCU would be profitable, i.e., the revenue would be more than all the costs, including a buy-out?



Hahaha. Come back when you're living in reality...

View attachment 285221

Numbers don’t lie. Nice chart. It will be interesting to see how Star Wars stacks up against Marvel in a few years.

 

[nitstalker]

I am personally very much split on the whole Comcast/Disney debacle.

As a Disney fan, I see how great it would be to bring Fox into the Disney family. Star wars comes home... Xmen (and maybe even deadpool) can join the MCEU. Plus so many of the other great IPs Fox has creates can be curated by the mouse.

On the other hand - I was the manager and projectionist for a historic movie theatre. Disney couldn't give two pooh's about the classics. They will never, ever allow any movie they own to be played after it's initial theater run. Historic single screen movie houses count on running classic movies to continue to stay alive, as first run movies do not pay the bills like they used to. Fox is the holder of one of the largest archives of Classic movies, which would be sealed off with a Disney takeover. Universal on the other hand has a proven track record of taking good care of our historic movies. Adding the Fox vault would continue to allow fans to see historic movies where they were meant to be seen - on the big screen.

 

[AnotherDayAnotherDollar]

I can confirm that Disney's IT department is in the running for being the worst or one of the worst IT departments I have ever seen. Both in Orlando and California. And I have worked for multiple clients across different industries. As big as Disney is they should not have such a subpar IT department.

Bamtech acquisition is a step in the right direction, but until they change some of the Directors, VPs, and C level executives they have there, things will stay the same.

One quick example that even with Bamtech their IT department sucks. ESPN+ has good niche content, but the curation, indexing, and notification is horrible and/or non existent. It is not a good UX and if it wasn't for the Rugby, boxing, MLS, and upcoming UFC content I would have cancelled. I still know people working in the IT department in FL and CA who laugh at how much things suck there. It's not a knock on Disney as a whole, but their IT department.

On topic, I think both companies will come out with something out of this deal. Sky will probably go to Comcast. The rest to the majority of the rest will probably go to Disney. I doubt Comcast and Disney will get into a high stakes bid war.....if they do, however, I favor Comcast as Iger himself said he wouldn't engage in it and the last 10-20% of a bid war is all about the executive's ego.

Acquiring OLC, possibly with a Japanese partner like Nintendo, for $25-30 Billion with major investments in all resorts makes more sense.

More thoughts later, I guess?

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.

I don't know why Disney would consider acquiring OLC at this point. I'm sure it's on the radar and the pipeline to actually acquire a stake there. I'm certain they want to have an ownership stake in every Disneyland Resort in the world. However, they would be better served using the capital on a 2nd gate for DLS and another Disneyland resort overseas (maybe a 2nd China one as Iger has been hinting). In 10+ years though? I can see them trying to acquire a majority stake in Disneyland Japan.

Disney buying SIE would be interesting but SIE does not have the global reach that something like Nintendo does. Disney also wouldn't be in the game HW business. However though, I am not sure it's that easy to buy a Japanese company. Especially one like Sony. I was surprised when no one made a bid for Nintendo when their market value was about 2T yen. Nintendo has truly a global outreach in terms of IP and no one batted an eye when their value was that low.

 

[mikejs78]

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

True but 5G technology is going to cut into the data service base. It'll introduce real competition in high speed internet for the first time in many places, and that competition should negate some of the effects of removing net neutrality. Lack of net neutrality is only a windfall in cases where competition doesn't exist or is effectively a monopoly or duopoly.

Besides, Net Neutrality will likely be back in the not-too-distant future.

Frankly most of Comcast's core businesses face major disruption in the next 5-10 years, far more so than Disney.

 

[Sirwalterraleigh]

True but 5G technology is going to cut into the data service base. It'll introduce real competition in high speed internet for the first time in many places, and that competition should negate some of the effects of removing net neutrality. Lack of net neutrality is only a windfall in cases where competition doesn't exist or is effectively a monopoly or duopoly.

Besides, Net Neutrality will likely be back in the not-too-distant future.

Frankly most of Comcast's core businesses face major disruption in the next 5-10 years, far more so than Disney.

It’s really kinda hard to equate Comcast core business to Disney’s though, isn’t it?

Comcast’s core is utility like contract service...cable and high speed.

Disney’s is tv content and parks (75%)...it’s hard to put the two into the same basket.

They both have unique vulnerabilities

 

[Quinnmac000]

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.

False, that condition ends in September of this year

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

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.

India is not an important market....Its like the #8 market...the thing is Fox's share of Hulu gives Comcast/Disney access to Japan which is the number 3 market after China.

 

[seascape]

True but 5G technology is going to cut into the data service base. It'll introduce real competition in high speed internet for the first time in many places, and that competition should negate some of the effects of removing net neutrality. Lack of net neutrality is only a windfall in cases where competition doesn't exist or is effectively a monopoly or duopoly.

Besides, Net Neutrality will likely be back in the not-too-distant future.

Frankly most of Comcast's core businesses face major disruption in the next 5-10 years, far more so than Disney.

Comcast will have major problems in the future if the get both Fox and Sky. Adding over 100 billion in debt, which is what it will cost in a bidding war for both, would prevent them from being able to spend the billions needed for 5G. They will lose their current advantages in broadband and also not have the money to expand their parks.

Now again I must repeat that as a consumer I am definitely against allowing either merger but allowing Disney to get them is much better than Comcast. Distribution must be kept away from Content. AT&T should not be allowed to get Time Warner, Comcast should not only not allowed to get Fox but should also be forced to divest NBC Universal.

 

[CaptainAmerica]

False, that condition ends in September of this year.

The condition on their first stake ends in September of this year, yes. But there'd be a new condition at least equal to the first but probably much more stringent (i.e. permanent) if their stake expanded to include control.

 

[mikejs78]

It’s really kinda hard to equate Comcast core business to Disney’s though, isn’t it?

Comcast’s core is utility like contract service...cable and high speed.

Disney’s is tv content and parks (75%)...it’s hard to put the two into the same basket.

They both have unique vulnerabilities

They do (as do all businesses). But Comcast's core businesses have structural problems that aren't easily solvable due the the changing landscape in the next few years. Disney has similar problems with ESPN, but it's other businesses can (and are) helping to prop up that declining business, especially Parks. Comcast has NBCU and it's own Parks, but neither is it's core and neither is to the scope and scale to what Disney has. Does Disney have risks? Sure. But outside of ESPN, there aren't any of the foreseeable inevitable declines that Comcast has.