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

[BrianLo]

The Fox purchase from Disney's perspective was always about content. There is value in sky, but 95% of it is the market access and distribution. There is very minimal content in Sky relative to the price. Unlike Star.

I think ultimately both companies got what they want. Comcast is still a distribution company, Disney is doubling down on content instead. There is certain stability in Sky comparatively, which is why its so valuable. Personally the way the industry is heading though I think Disney is looking the right way. The NBC-U purchase for Comcast provided them more long term stability than I think the Sky purchase did.

Apart from Comcast forcing up the price on the way too reasonable deal Disney was getting, in the end Disney has shed itself of a quite a lot of things in the package deal it only sort of wanted and is left with what Iger was really strategically after.

 

[Indy_UK]

Comcast overpaid for SKY but ultimately while in a market where subscriber numbers are starting to decline, it is still highly profitable.

Disney has bought a TON more content through Fox to add to the maintain of IP they already have but now need to put in the hard work and capital to make big money from it all. They will burn through money in the first few years to get Hulu and Disney + where they need to be but should reap the outlay long term.

They always say 'content is King' which is why Disney will probabaly prevail long term.

It's amazing that we have no clue yet what Disneys plans are with the Fox content. There is ALOT there that will make some serious money (especially In TV)

I'm still wondering if splitting all this content over 3 separate Apps is the right way to go about it though.

 

[AnotherDayAnotherDollar]

MLex: Brazil decision on Disney/Fox now put off past January
Jan. 23, 2019 2:51 PM ET|By: Jason Aycock, SA News Editor


Brazil's ruling on Disney's (NYSE:DIS) $71B deal to buy the media assets of Twenty-First Century Fox (FOX, FOXA +0.2%) will now wait past Jan. 30 in a new delay, MLex reports.

Earlier MLex reporting in November suggested that Brazil's Tribunal could sign off on the deal at its last session of 2018 on Dec. 5; after that, it wasn't set to reconvene until Jan. 30.

Now it looks like that decision is further off.

When it does come, with a satisfactory consent decree already drafted, a recommendation could end up in a decision for the deal to proceed. Regulator CADE still has until March 18 to issue its initial decision on the deal.

Fox shares dipped suddenly just minutes ago but have recovered.

Source: Bloomberg

https://seekingalpha.com/news/34252...sney-fox-now-put-past-january?dr=1#email_link

 

[Slpy3270]

That Brazil can't seem to make up its mind regarding the conditions to impose suggests the deal is in much bigger limbo there than Disney and Fox realize.

 

[OG Runner]

UGH. More dilution of the Disney classics.

Although I might forgive all if they find a way to overlay Haunted Mansion in DHS as a Home Alone attraction.

Great, you come into the attraction and end up getting hit in the head with a paint can.

 

[OG Runner]

Sadly I don't see them going forward with any more Alien films unless Disney doesn't care at this point.

The Winnie the Pooh, Aliens crossover. Invasion the Hundred Acre Wood.

 

[brodie999]

That Brazil can't seem to make up its mind regarding the conditions to impose suggests the deal is in much bigger limbo there than Disney and Fox realize.

Agreed. I thought they were gonna approve the deal on the 30th. Even CTFN said so. But they wait too long to rule out approvals on acquisitions.

 

[Lafayettecalboy]

Agreed. I thought they were gonna approve the deal on the 30th. Even CTFN said so. But they wait too long to rule out approvals on acquisitions.

I think that is the reason why Disney/Fox still uses the term First Half of 2019 unlike what Variety and other press trades to account for the fact there could be hurdles.

 

[Slpy3270]

I think the issue with Brazil is that Disney and Fox seemed to misjudge the sports broadcasting market there when they were drafting the deal.

At first I thought the international sports channels were staying with Fox since they're operated by Fox Sports. After thoroughly reading the June proxy statement, however, I found out that wasn't the case. The Fox international sports channels are considered part of Fox Networks Group, which is wholly being sold to Disney. That means Fox's international sports operations are being merged into ESPN, with Fox only keeping Fox Sports' American operations sans the regional sports channels, which Fox saw as a cash burner and wanted to dispose of (hence why they aren't buying them back).

According to the statement, Disney sees the international sports channels and properties as a path for ESPN to expand efficiently worldwide. ESPN has struggled to expand worldwide in recent years and the international sports channels from Fox seem to be the best path forward for ESPN to get a global reach.

Which brings us to Brazil. Fox Sports and ESPN Brazil control the market like a monopoly, and the deal stipulates that both entities would merge. That's why so many Brazilian cable operators and competitors have rebelled against the deal, and CADE seems to be taking those criticisms seriously, hence why CADE can't seem to come to a consensus regarding behavioral or structural conditions, thus explaining all the conflicting info going around regarding Brazil's stance on the deal. There's also the fact that ESPN Brazil's ability to grow in the country could be compromised if they're required to spin-off a huge part, if not all, of Fox Sports Brazil, and Brazil is one of the biggest sports broadcasting markets in Latin America so ESPN can't afford to lose that market.

And it will be much harder to find a buyer for Fox Sports Brazil should Disney be required to spin it off, because there's not that many sports broadcasters in Brazil and Fox isn't interested in staying in Brazil since they want to be a US-focused company.

So now Disney and Fox are potentially caught between a rock and a hard place, because of an issue they probably did not see coming, so it wouldn't shock me if Brazil decides against the approving the deal because they couldn't come to a consensus on what conditions to impose that wouldn't drastically affect how Disney does business there.

 

[Lafayettecalboy]

I think a solution will be worked out and then the deal will be approved by Brazil.

 

[brodie999]

I think a solution will be worked out and then the deal will be approved by Brazil.

I hope it's before or on the 30th because AT&T sold off A&E Europe in order to get Europe's approval of the WarnerMedia merger. So hopefully, Disney and Fox will do something similar by selling Fox Sports Brazil, so their deal can gain approval from Brazil.

 

[Slpy3270]

I hope it's before or on the 30th because AT&T sold off A&E Europe in order to get Europe's approval of the WarnerMedia merger. So hopefully, Disney and Fox will do something similar by selling Fox Sports Brazil, so their deal can gain approval from Brazil.

Again, the problem is that a) Disney sees Fox Sports Brazil as a valuable asset to help ESPN Brazil, and by extension ESPN Latin America, grow, and b) the sports broadcasting market in Brazil is so concentrated that there may not be anyone around to buy FS Brazil at a reasonable price, assuming anyone in Brazil is around to buy it.

If Disney wanted to divest Fox Sports Brazil to get CADE's approval, why didn't they do so in the first place?

 

[AnotherDayAnotherDollar]

Again, the problem is that a) Disney sees Fox Sports Brazil as a valuable asset to help ESPN Brazil, and by extension ESPN Latin America, grow, and b) the sports broadcasting market in Brazil is so concentrated that there may not be anyone around to buy FS Brazil at a reasonable price, assuming anyone in Brazil is around to buy it.

If Disney wanted to divest Fox Sports Brazil to get CADE's approval, why didn't they do so in the first place?

My understanding is that Brazil has Bandeirantes and Globo who are also big sports players and broadcasters in Brazil, especially the latter. Globo has a lot of sports channels in Brazil and they are trying to fight the merger seeing how ESPN/Disney would be a major force challenging their monopoly. I don't think Disney will be required to divest FS in Brazil or LA.

 

[Slpy3270]

My understanding is that Brazil has Bandeirantes and Globo who are also big sports players and broadcasters in Brazil, especially the latter. Globo has a lot of sports channels in Brazil and they are trying to fight the merger seeing how ESPN/Disney would be a major force challenging their monopoly. I don't think Disney will be required to divest FS in Brazil or LA.

If that's the case, CADE not coming to a consensus because of a lack of agreement on conditions makes no sense from a legal standpoint.

I sense something fishy.

 

[Rodan75]

If that's the case, CADE not coming to a consensus because of a lack of agreement on conditions makes no sense from a legal standpoint.

I sense something fishy.

They are going through a major political shift at the moment.

 

[Lafayettecalboy]

We should all have a prayer circle so that both Brazil and Mexico can approve it soon.

 

[Twilight_Roxas]

Can we get the infinity gauntlet, and infinity stones while we’re at it?

 

[Crossfire]

I don't think it's going to take that much time for Brazil to approve it, it's not going to be in jan 30, but it won't be too long after that.

 

[britain]

I don't think it's going to take that much time for Brazil to approve it, it's not going to be in jan 30, but it won't be too long after that.

I know that’s Deadpool, but it sure comes off as Strong Bad.

 

[Indy_UK]

I wish they would hurry up. I know Uncle bob will spill all the beans on what’s happening with Fox in the next earnings call but it would be nice for some official news.

I definitely think Star Wars movies will go to every 2 years and Avatar 2 will take the Christmas 2020 slot.

I think there will be a home alone reboot somewhere too