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

[AnotherDayAnotherDollar]

Based on this, it sounds like the deal was already done.

Hulu, meanwhile, became even more Disney-fied last month when Disney bought out WarnerMedia’s 10% interest. Asked if international expansion or other changes to the loss-making service will be possible so long as Comcast remains a 33% minority partner, Iger expressed some caution. “Any big decisions that are made in terms of investment or expansion would have to be done with their cooperation,” he said. “We both probably share a bullish outlook on Hulu, but we can’t do it on our own.”

Also suggest that Comcast may not be selling as speculated and actually willing to participate in the process.

That pretty much confirms how bad it is that Hulu has joint ownership. They can't do a lot of things with it.

I also disagree with what you said about Comcast. Sherman's report is that the companies are talking and Comcast is considering selling. Iger and Roberts have both confirmed that. Sherman himself stated nothing may happen.

When 2 companies are talking like this it's just a matter of money. Like I said, I think Comcast will be asking for 6-7B for their 30% (assuming they don't get the extra 3%). Any Marvel rights are a non issue and would just be cherry on top of such a preimum.

Iger implied all scenarios are possible, 70/30, 67/33 and 100/0. It was a strangely open Iger. The last time he was like that he triggered the first ESPN sell off.

Speaking of that, he was very open about NFL Sunday ticket too. Surprisingly. It's clear they are talking to the NFL and seeing if they can get something. That would be a huge coup.

I agree.... He almost spilled the beans on the next slate of Marvel movies. He talked about how he was such a Marvel fan boy and was excited about what is coming. I thought he was going to give line by line details about his discussions with Brian Roberts, when he talked about the potential deal with Comcast. He really had to pull himself back multiple times. I got the feeling they are horse trading, more than just negotiating on price.

He was almost giddy, but why wouldn't he be, as multiple investments are coming to fruition all at once 1) Marvel end-game yielding over 2 billion in 10 days, 2) Star Wars Land about to open [the talked about riding the Falcon multiple times] 3) the Parks up 15% year over year 4) the Fox deal, the stock price up 20% over the last month..... One can argue he has pulled the inside straight. His shoes will be hard to fill....

Lol yeah dude almost said that. He pretty much confirmed a lot of what we know and see online is true. And he almost said what was going on in Marvel Land at Disneyland. Pretty much confirmed a 2nd Disney Park in Shanghai and kinda hinted at a 2nd Disneyland in China. Wish I could buy him some drinks today and get him to spill all the beans haha. One of the analysts saw that and tried to push him to get him to spill more and he was like, "I'm not saying anything else, you can go on with your assumptions"

Why do you think they are horse trading though? What would that be? I'm thinking the issue here is price more than anything.

 

[bartholomr4]

Why do you think they are horse trading though? What would that be? I'm thinking the issue here is price more than anything.
[/QUOTE]

I think Rodan75 alluded to the time Iger was this loose in a call, is when the ESPN troubles started to mount. If I remember correctly (Rodan75 please chime in here) Iger was communicating what was happening without actually saying it in detail. He was wanting to notify the Market about what was happening and sending signals about what he wanted.... Being a student of Game Theory, I think yesterday Bob was sending signals to the market and to Brian Roberts.

In negotiations training, they trained me to figure out your "BATNA" before you start to negotiate. BATNA = Best Alternative to No Agreement, or where you walk away. If you can negotiate something better then the BATNA, you should do the deal. I am thinking both men have established their BATNA, and are working to send signals to each other to move to some place in between.

Lets say you are right in your estimate of $6-7 billion for Comcast. That price would be way above what the market expects(This morning on CNBC, they had 3 analysts on and asked each what value to put on the 30% of Hulu, all three were between $4.5 and $5 Billion). To get to that price, Bob either has to disappoint the analysts, Talk Brian Roberts down, or somehow extract some concessions in the payout for NBCU content. If I am Bob, I am looking at my book to see if there are things that Brian Roberts wants, which I have, which I know are not strategic and I am putting them on the table. I am also looking at things Brian has, which he may not want, which I can use to justify paying the higher price.

To that end, there are 21CF assets which are not strategic, which will likely get shut down. Fox Annimation, Blue Sky, Endimol Shine, etc are either going to be shut-down, absorbed, or sold. The company just wrote off its investment in Vice, because I think, it has become a distraction. At this level, Bob wants Hulu, and Brian knows he does. Brian is in huge debt, and Hulu is going to force Comcast to cough up 200 to 300 million a quarter. What better time is there to trade away these assets?

Negotiations at this level is an art. There are intermediaries, accountants and lawyers everywhere. Brian Robert stepped in and took Sky away from Iger, and made him pay more for the remaining assets. Iger forced Roberts to pay almost twice the highest estimate for Sky in the 3 bid auction.... It is probably safe to say there is no love lost between these two.... So anything is possible. Both men have great people to advise them on reading the signals, getting to the deal. I wouldn't be surprised if they announce an all cash deal tomorrow at the price you suggest, but also would lean more toward that price, plus or minus some sweeteners. Just my opinion - Gut feel. And opinions are like elbows... Most people have more than one of them.

 

[AnotherDayAnotherDollar]

Why do you think they are horse trading though? What would that be? I'm thinking the issue here is price more than anything.

[/QUOTE]

I think you messed up your quotes.

 

[bartholomr4]

I think you messed up your quotes.
[/QUOTE]

Ya, somehow hit send as I was replying to your question.... my response is above....

 

[AnotherDayAnotherDollar]

I think Rodan75 alluded to the time Iger was this loose in a call, is when the ESPN troubles started to mount. If I remember correctly (Rodan75 please chime in here) Iger was communicating what was happening without actually saying it in detail. He was wanting to notify the Market about what was happening and sending signals about what he wanted.... Being a student of Game Theory, I think yesterday Bob was sending signals to the market and to Brian Roberts.

In negotiations training, they trained me to figure out your "BATNA" before you start to negotiate. BATNA = Best Alternative to No Agreement, or where you walk away. If you can negotiate something better then the BATNA, you should do the deal. I am thinking both men have established their BATNA, and are working to send signals to each other to move to some place in between.

Lets say you are right in your estimate of $6-7 billion for Comcast. That price would be way above what the market expects(This morning on CNBC, they had 3 analysts on and asked each what value to put on the 30% of Hulu, all three were between $4.5 and $5 Billion). To get to that price, Bob either has to disappoint the analysts, Talk Brian Roberts down, or somehow extract some concessions in the payout for NBCU content. If I am Bob, I am looking at my book to see if there are things that Brian Roberts wants, which I have, which I know are not strategic and I am putting them on the table. I am also looking at things Brian has, which he may not want, which I can use to justify paying the higher price.

To that end, there are 21CF assets which are not strategic, which will likely get shut down. Fox Annimation, Blue Sky, Endimol Shine, etc are either going to be shut-down, absorbed, or sold. The company just wrote off its investment in Vice, because I think, it has become a distraction. At this level, Bob wants Hulu, and Brian knows he does. Brian is in huge debt, and Hulu is going to force Comcast to cough up 200 to 300 million a quarter. What better time is there to trade away these assets?

Negotiations at this level is an art. There are intermediaries, accountants and lawyers everywhere. Brian Robert stepped in and took Sky away from Iger, and made him pay more for the remaining assets. Iger forced Roberts to pay almost twice the highest estimate for Sky in the 3 bid auction.... It is probably safe to say there is no love lost between these two.... So anything is possible. Both men have great people to advise them on reading the signals, getting to the deal. I wouldn't be surprised if they announce an all cash deal tomorrow at the price you suggest, but also would lean more toward that price, plus or minus some sweeteners. Just my opinion - Gut feel. And opinions are like elbows... Most people have more than one of them.

Yes this makes sense.

Do you have a link to these analysts pricing Hulu by any chance?

I don't think Disney would divest Fox Animation or Blue Sky, especially since they had Ice Age in one of their early slides. Maybe layoffs and streamline the teams, but not getting rid of them. By the way that would be same issue Comcast would have since they own Illumination and Dreamworks. Endemol Shine? I see Disney wanting to divest, but not sure Comcast would want them. They would also have to deal with a 3rd party that owns 50% further complicating the deal.

I do agree though that both would come with a price in mind along with assets. The only thing that I believe either would want would be Disney wanting those mystical Marvel rights Comcast owns - including distribution to previous movies, rights of first refusal, and yes - the impossible amendment to the MCA contract. I don't think Comcast would ask for any assets, just cash.

We'll see what happens. News first broke 2 weeks ago and there's confirmation they are still talking. I think the deal will get done. For how much and what comes with it though, who knows?

 

[Rodan75]

Yes this makes sense.

Do you have a link to these analysts pricing Hulu by any chance?

I don't think Disney would divest Fox Animation or Blue Sky, especially since they had Ice Age in one of their early slides. Maybe layoffs and streamline the teams, but not getting rid of them. By the way that would be same issue Comcast would have since they own Illumination and Dreamworks. Endemol Shine? I see Disney wanting to divest, but not sure Comcast would want them. They would also have to deal with a 3rd party that owns 50% further complicating the deal.

I do agree though that both would come with a price in mind along with assets. The only thing that I believe either would want would be Disney wanting those mystical Marvel rights Comcast owns - including distribution to previous movies, rights of first refusal, and yes - the impossible amendment to the MCA contract. I don't think Comcast would ask for any assets, just cash.

We'll see what happens. News first broke 2 weeks ago and there's confirmation they are still talking. I think the deal will get done. For how much and what comes with it though, who knows?

I’m assuming that Disney is pleased with what they’ve seen of Spies in Disguise and Nimona, otherwise I suspect they would have already announced a Blue Sky closure, similar to the Fox2000 closure. I agree I don’t think Blue Sky would go up for sale. I think their catalog is worth more than a sale price at this moment.

Roberts could get Disney to overpay for Hulu by tossing in the Marvel Theme Park and movie rights. Immediately after Endgame, the theme park rights would appear to have a high value and the market would reward Disney for getting them. As we’ve discussed they aren’t really worth Disney paying for, but Universal isn’t maximizing their ability to profit from them either, they both look silly.

The real battle ahead is for Sunday Ticket. Everyone wants those rights. And it behooves everyone to make the eventual winner pay as much as possible.

 

[Quinnmac000]

I’m assuming that Disney is pleased with what they’ve seen of Spies in Disguise and Nimona, otherwise I suspect they would have already announced a Blue Sky closure, similar to the Fox2000 closure. I agree I don’t think Blue Sky would go up for sale. I think their catalog is worth more than a sale price at this moment.

Roberts could get Disney to overpay for Hulu by tossing in the Marvel Theme Park and movie rights. Immediately after Endgame, the theme park rights would appear to have a high value and the market would reward Disney for getting them. As we’ve discussed they aren’t really worth Disney paying for, but Universal isn’t maximizing their ability to profit from them either, they both look silly.

The real battle ahead is for Sunday Ticket. Everyone wants those rights. And it behooves everyone to make the eventual winner pay as much as possible.

Nimona is due to the fact Disney is trying to lock in a first look deal with the author of the graphic novel before DreamWorks poaches her (She is the showrunner of DreamWorks She-ra series on Netflix). additionally, Disney has minority ownership in Boom studios which is producing it and its not worth burning that bridge. As for Spies in Disguise, its probably close to completion and not worth scrapping and losing all the money they invested in the project but I have a feeling it will flop against the other films coming out this holiday season.

Comcast is still acquiring other things behind the scenes so I don't think Roberts is just after cash. He wants something that will help enhance his company than just money. A few things I can potentially Comcast wanting even more than cash actually is Fox animation. Ironically, animation and comedy has created more value for Universal than blockbuster films. If Universal can get their hands on certain projects/studios they will take it.

 

[Rodan75]

Nimona is due to the fact Disney is trying to lock in a first look deal with the author of the graphic novel before DreamWorks poaches her (She is the showrunner of DreamWorks She-ra series on Netflix). additionally, Disney has minority ownership in Boom studios which is producing it and its not worth burning that bridge. As for Spies in Disguise, its probably close to completion and not worth scrapping and losing all the money they invested in the project but I have a feeling it will flop against the other films coming out this holiday season.

Comcast is still acquiring other things behind the scenes so I don't think Roberts is just after cash. He wants something that will help enhance his company than just money. A few things I can potentially Comcast wanting even more than cash actually is Fox animation. Ironically, animation and comedy has created more value for Universal than blockbuster films. If Universal can get their hands on certain projects/studios they will take it.

It makes no sense for Disney to give up Fox Animation. It is a major revenue machine for the TV division. Disney wants Hulu to monetize things like Fox Animation.

But I agree on the concept, Comcast wants to make transformative purchases. Minority ownership of Hulu is a distraction.

 

[AnotherDayAnotherDollar]

It makes no sense for Disney to give up Fox Animation. It is a major revenue machine for the TV division. Disney wants Hulu to monetize things like Fox Animation.

But I agree on the concept, Comcast wants to make transformative purchases. Minority ownership of Hulu is a distraction.

The one thing from the recent call though is that Christine McCarthy said this:

Christine McCarthy

And Doug, as it relates to the studio and where it factors in with the $2 billion of synergies, at the time that we announced the transaction, that was the number, and it did include the studio. It included a reduction in output as well as 2 studios that had a significant amount of overlap. With overlap came redundancies, and that's all part of the cost synergies that were well on the way of realizing for the studio.

It seems she's talking about Fox 2000 having redundancy with the rest of Fox. Not sure if anything else will come of that. As you said, they would have shut them down by now. I don't think they have any plans for studios shut down at this point (instead they will trim the output from Fox to 5 or 6+ films per year + Searchlight films. Shutting a studio down is one of the first things they would (and did) do for cost synergies. They just confirmed Bob's Burgers movie for next year as well as upcoming Family Guy and Simpsons movies. Plus all the TV output and Simpsons being front and center for Disney+. Fox Animation is not being divested. If anything I see them putting more capital into it while trimming the fat.

Blue Sky is a bit more in danger of being divested, but Iger mentioned buying Pixar and how that helped fix WDA. I don't think it's far fetched to say they see the same being applied to Blue Sky. I still don't know if them changing Spies in Disguise to December (5 days after TRoS) is a sign that they see is a family movie and that it will do well in the holidays or if they see that as a way to try to recoup the money. Remains to be seen, but I don't think Disney is wanting to divest them either.

I have talked to someone about Comcast and what they should be looking at for M&A and Vodafone came up. I do think that would be a tremendous acquisition by them and will allow them to grow and expand internationally (as Roberts said they want to).

 

[seascape]

The one thing from the recent call though is that Christine McCarthy said this:



It seems she's talking about Fox 2000 having redundancy with the rest of Fox. Not sure if anything else will come of that. As you said, they would have shut them down by now. I don't think they have any plans for studios shut down at this point (instead they will trim the output from Fox to 5 or 6+ films per year + Searchlight films. Shutting a studio down is one of the first things they would (and did) do for cost synergies. They just confirmed Bob's Burgers movie for next year as well as upcoming Family Guy and Simpsons movies. Plus all the TV output and Simpsons being front and center for Disney+. Fox Animation is not being divested. If anything I see them putting more capital into it while trimming the fat.

Blue Sky is a bit more in danger of being divested, but Iger mentioned buying Pixar and how that helped fix WDA. I don't think it's far fetched to say they see the same being applied to Blue Sky. I still don't know if them changing Spies in Disguise to December (5 days after TRoS) is a sign that they see is a family movie and that it will do well in the holidays or if they see that as a way to try to recoup the money. Remains to be seen, but I don't think Disney is wanting to divest them either.

I have talked to someone about Comcast and what they should be looking at for M&A and Vodafone came up. I do think that would be a tremendous acquisition by them and will allow them to grow and expand internationally (as Roberts said they want to).

I do not think the EU would look favorably on Comcast buying Vodafone. I also cant see Comcast buying sny asset that costs billions more in debt. They have major expenses coming soon to compete with 5G in the US. Plus competition will lower their price for all their services. That said Sprint would be an interesting choice if they really want to compete for cellular service and it would allow for synergies. Plus is would be an easy approval process and not cost nearly as much.

 

[Indy_UK]

$6-7 billion for 30% of Hulu and the Marvel theme park rights seems a fair deal.

I hope a deal can happen sooner rather than later so Disney can get working on International expansion of Hulu. They need content providers and I can see quite a few U.K. Based ones buddying up with Hulu

 

[Quinnmac000]

$6-7 billion for 30% of Hulu and the Marvel theme park rights seems a fair deal.

I hope a deal can happen sooner rather than later so Disney can get working on International expansion of Hulu. They need content providers and I can see quite a few U.K. Based ones buddying up with Hulu

nah...not when they also have their own.
https://www.britbox.com/

 

[Indy_UK]

We'll have to see on Britbox. There's not much of an appetite for it as it's yet again a separate service. Not sure if it's happening in the U.K too but I'm sure I read somewhere that the BBC are pulling their content from Netflix and putting it on Discovery's streaming app which goes live next year but that may be program specific.

I love Hulu but even when I access it now, there's not tons of content that grab me, maybe it needs more content providers, maybe it doesn't

 

[ImperfectPixie]

We'll have to see on Britbox. There's not much of an appetite for it as it's yet again a separate service. Not sure if it's happening in the U.K too but I'm sure I read somewhere that the BBC are pulling their content from Netflix and putting it on Discovery's streaming app which goes live next year but that may be program specific.

I love Hulu but even when I access it now, there's not tons of content that grab me, maybe it needs more content providers, maybe it doesn't

As someone who just signed up for the free trial of Hulu...it ABSOLUTELY needs more content...specifically BETTER content. Hubby and I were looking through its offerings the other day, and sadly, we were not impressed.

 

[Indy_UK]

I watch the stuff that's been out a while, American Horror Story, Golden Girls, Twilight Zone but newer stuff would be good. I find a lot of TV shows have series missing or only the odd series there.

I like the Interface but if Disney gets full control, I can see that getting scrapped and them getting Bamtech to design one that looks more similar to Disney+

 

[Quinnmac000]

there is a vast vast vast difference in what hulu offers based on tiers....their live television pretty much triples the library vs hulu standard with and without ads.

However, the most watched shows are the ones that have been on the air for at least 5 seasons, which means people like to put on things that are long but at the same time don't have to pay attention to like B99, Bob's Burgers, South Park, Grey's Anatomy, Law and Order:SVU, etc.

 

[ImperfectPixie]

there is a vast vast vast difference in what hulu offers based on tiers....their live television pretty much triples the library vs hulu standard with and without ads.

However, the most watched shows are the ones that have been on the air for at least 5 seasons, which means people like to put on things that are long but at the same time don't have to pay attention to like B99, Bob's Burgers, South Park, Grey's Anatomy, Law and Order:SVU, etc.

Which would be perfect...if they had shows and movies that we actually want to watch. Big Bang Theory, Mom, George Lopez and the like are more our cup of tea. We haven't checked yet, but do you know if there is a decent selection of stand-up comedy?

EDIT: I think I just signed up for the most basic version of Hulu...I'm thinking I should move up to include the live TV and at least take a peek.

 

[Quinnmac000]

Which would be perfect...if they had shows and movies that we actually want to watch. Big Bang Theory, Mom, George Lopez and the like are more our cup of tea. We haven't checked yet, but do you know if there is a decent selection of stand-up comedy?

nope, that's 100% Netflix terrority, Hulu only has 10 total stand up specials all relatively old too

 

[ImperfectPixie]

nope, that's 100% Netflix terrority, Hulu only has 10 total stand up specials all relatively old too

Thanks. We've had Netflix pretty much since they first arrived on the scene and we've always loved it. I really hope Disney ups the Hulu game significantly because we tend to be very loyal customers and fully intend to get Disney+ when it comes out...it would be nice to only have a few services and be able to cut the cord without needing to patch "holes" here and there with individual channel services.

 

[Quinnmac000]

Which would be perfect...if they had shows and movies that we actually want to watch. Big Bang Theory, Mom, George Lopez and the like are more our cup of tea. We haven't checked yet, but do you know if there is a decent selection of stand-up comedy?

EDIT: I think I just signed up for the most basic version of Hulu...I'm thinking I should move up to include the live TV and at least take a peek.

Definitely add Live TV...it adds CBS and all the cable channel programming as well as opens VOD for almost all those channels as well.

[/QUOTE]

Thanks. We've had Netflix pretty much since they first arrived on the scene and we've always loved it. I really hope Disney ups the Hulu game significantly because we tend to be very loyal customers and fully intend to get Disney+ when it comes out...it would be nice to only have a few services and be able to cut the cord without needing to patch "holes" here and there with individual channel services.

Based on the articles that came out, Hulu may actually be in a much better position than Disney+ at launch as the series they have ordered for Disney+ are all becoming too adult and they have had to neuter a lot to fit the family demographic they wanted
.
https://deadline.com/2019/05/disney...sical-the-series-showrunner-exits-1202607440/

But Hulu currently as long as other partners do not pull out is an excellent value.