Umm 21st Century Fox Purchase?

[IanDLBZF]

James Murdouch is declining this though....
http://deadline.com/2017/12/foxs-james-murdoch-declines-talk-disney-negotiations-1202220424/

 

[Ripken10]

James Murdouch is declining this though....
http://deadline.com/2017/12/foxs-james-murdoch-declines-talk-disney-negotiations-1202220424/

You mean declining to comment on it, which is standard practice.

 

[AnotherDayAnotherDollar]

It is reported as a stock transaction. That means they will give something like 1 share of Disney stock for about 4 shares of Fox. The only way for them to do that is using shares they own, i.e. treasury stock from previous buybacks. The exact value is a guess but since its reported as a 60 billion dollar deal including assuming Fox debt the best guess I have is a 4 to 1 trade. It could be 3 for 1 but that would value Fox well over 60 billion just for what they are buying with the existing owners still owning quite a bit.

60B in an all stock transaction means Disney is giving up ~37-38% of the company to Fox, and not even getting all of the company. Now, if that is a 60B transaction including assumption of debt and Fox's bid for Sky (~16B), that's a different story. They would have to give up maybe 30-40B in stock, which would be 16-25% a lot easier to digest.

 

[Darkbeer1]

A couple of Interesting articles.

http://www.latimes.com/business/hol...s-murdoch-disney-marriage-20171205-story.html

>>Insiders and industry veterans say there are several reasons Disney has emerged as a front-runner in the auction for Fox’s Los Angeles-based entertainment assets. Such a large transaction — estimated at more than $60 billion — would entail a stock transfer that would enable press baron Rupert Murdoch and his family to become leading shareholders in the world’s most powerful entertainment brand, wielding influence for decades to come<<

https://www.theguardian.com/media/2017/dec/05/disney-james-murdoch-21st-century-fox-ceo

>>The Fox boss James Murdoch is reportedly being considered as a potential successor to Bob Iger, chief executive of Walt Disney, if the two companies reach agreement on a possible takeover.

According to the Financial Times, Rupert Murdoch and his younger son, James, could take senior roles at a combined company if a deal is struck. Iger, 66, is due to retire in 2019 and James Murdoch, 44, currently chief executive of 21st Century Fox and chairman of the satellite broadcaster Sky, is a possible successor.<<

>>Iger has been Disney’s boss since 2005 and is one of the most highly rated executives in media. The company has, however, struggled to groom a successor. Disney’s chief operating officer, Tom Staggs, once seen as Iger’s top pick, resigned in 2016 after the board failed to assure him he would be Iger’s heir. More recently, Facebook’s chief operating officer, Sheryl Sandberg, has been tipped as a potential hire.<<

Interesting happenings, and would allow Bob Iger to run for President of the United States.

 

[Tavernacle12]

A couple of Interesting articles.

http://www.latimes.com/business/hol...s-murdoch-disney-marriage-20171205-story.html

>>Insiders and industry veterans say there are several reasons Disney has emerged as a front-runner in the auction for Fox’s Los Angeles-based entertainment assets. Such a large transaction — estimated at more than $60 billion — would entail a stock transfer that would enable press baron Rupert Murdoch and his family to become leading shareholders in the world’s most powerful entertainment brand, wielding influence for decades to come<<

https://www.theguardian.com/media/2017/dec/05/disney-james-murdoch-21st-century-fox-ceo

>>The Fox boss James Murdoch is reportedly being considered as a potential successor to Bob Iger, chief executive of Walt Disney, if the two companies reach agreement on a possible takeover.

According to the Financial Times, Rupert Murdoch and his younger son, James, could take senior roles at a combined company if a deal is struck. Iger, 66, is due to retire in 2019 and James Murdoch, 44, currently chief executive of 21st Century Fox and chairman of the satellite broadcaster Sky, is a possible successor.<<

>>Iger has been Disney’s boss since 2005 and is one of the most highly rated executives in media. The company has, however, struggled to groom a successor. Disney’s chief operating officer, Tom Staggs, once seen as Iger’s top pick, resigned in 2016 after the board failed to assure him he would be Iger’s heir. More recently, Facebook’s chief operating officer, Sheryl Sandberg, has been tipped as a potential hire.<<

Interesting happenings, and would allow Bob Iger to run for President of the United States.

I wasn't thrilled with this deal to begin with, and am genuinely against it if it means the Murdochs get any kind of say at Disney.

 

[BigThunder26]

A couple of Interesting articles.

http://www.latimes.com/business/hol...s-murdoch-disney-marriage-20171205-story.html

>>Insiders and industry veterans say there are several reasons Disney has emerged as a front-runner in the auction for Fox’s Los Angeles-based entertainment assets. Such a large transaction — estimated at more than $60 billion — would entail a stock transfer that would enable press baron Rupert Murdoch and his family to become leading shareholders in the world’s most powerful entertainment brand, wielding influence for decades to come<<

https://www.theguardian.com/media/2017/dec/05/disney-james-murdoch-21st-century-fox-ceo

>>The Fox boss James Murdoch is reportedly being considered as a potential successor to Bob Iger, chief executive of Walt Disney, if the two companies reach agreement on a possible takeover.

According to the Financial Times, Rupert Murdoch and his younger son, James, could take senior roles at a combined company if a deal is struck. Iger, 66, is due to retire in 2019 and James Murdoch, 44, currently chief executive of 21st Century Fox and chairman of the satellite broadcaster Sky, is a possible successor.<<

>>Iger has been Disney’s boss since 2005 and is one of the most highly rated executives in media. The company has, however, struggled to groom a successor. Disney’s chief operating officer, Tom Staggs, once seen as Iger’s top pick, resigned in 2016 after the board failed to assure him he would be Iger’s heir. More recently, Facebook’s chief operating officer, Sheryl Sandberg, has been tipped as a potential hire.<<

Interesting happenings, and would allow Bob Iger to run for President of the United States.

Well, crap. I don't know if getting X-Men is worth having a damn Murdoch in control. Ends definitely do not justify the means here.

 

[IanDLBZF]

Iger could be extending his contract should the Fox buyout be successful just saying.

 

[Darkbeer1]

The LA Times take on Iger staying.

http://www.latimes.com/business/hollywood/la-fi-ct-disney-bob-iger-fox-20171206-story.html

>>Analysts said they would not be surprised to see Iger stay on the job a few more years.

"This is exactly what Disney would need — a great integrator of business units following a merger,” said C. Kerry Fields, a professor of business law and ethics at the USC Marshall School of Business. “It provides stability to the management teams on both sides of the transaction. Having an experienced hand following an acquisition is crucial to ensure that the merged-in company will fit the culture and opportunities of the acquirer.<<

And looks like Fox has an Ace up its sleeve that makes Disney and Comcast drool...

http://www.latimes.com/business/hollywood/la-fi-ct-disney-fox-sports-nets-espn-20171206-story.html

>>Disney would like to buy Fox’s 22 regional sports networks — including Prime Ticket, Fox Sports West and YES, the network that carries the New York Yankees — as part of any deal, according to two people familiar with the discussions who were not authorized to comment.

Regional channels have become highly lucrative because they draw ardent sports fans who want to connect with their local teams. Fox’s local sports networks carry the games of 44 professional teams in three leagues: Major League Baseball, the National Basketball Assn. and the National Hockey League. That includes the NBA Los Angeles Clippers and the NHL Kings and Ducks.

Regional sports networks often rank among the most popular cable channels, which increases their value. Viewers tend to watch games live — rather than recording them — which makes the commercial time available in sports particularly worthwhile to advertisers.<<

Comcast already has 7 NBC Sports Regional Networks, and basically would control most of the market if it buys Fox, though Spectrum has a few.

Drawback is more pro and college teams are creating their own networks.

Let the bidding wars begin.

 

[the.dreamfinder]

Could Disney be split in half after a merger?
From The Hollywood Reporter’s Paul Bond and Georg Szalai
https://www.hollywoodreporter.com/news/will-disney-eventually-split-two-post-fox-merger-1065902

FWIW, I’d prefer if Disney acquired TimeWarner, since the ATT deal has a much higher likelihood of failure now with the DoJ lawsuit. TWDC keeps HBO and puts WB and Turner with ABC and ESPN to form a new company called, naturally enough, Warner Communications Corporation. This company is then IPO’d and TWDC takes the proceeds to either take itself private and/or make substantial long term investments into its existing and emerging lines of business.

 

[MisterPenguin]

Could Disney be split in half after a merger?
From The Hollywood Reporter’s Paul Bond and Georg Szalai
https://www.hollywoodreporter.com/news/will-disney-eventually-split-two-post-fox-merger-1065902

FWIW, I’d prefer if Disney acquired TimeWarner, since the ATT deal has a much higher likelihood of failure now with the DoJ lawsuit. TWDC keeps HBO and puts WB and Turner with ABC and ESPN to form a new company called, naturally enough, Warner Communications Corporation. This company is then IPO’d and TWDC takes the proceeds to either take itself private and/or make substantial long term investments into its existing and emerging lines of business.

Funny how when Wall St. gets into deal-making-mode with splitting companies and shifting debt to create entities greater than the whole, they seem to forget that the digital spin-off contains ESPN which they've been so down on. If they were recently harping on ESPN bringing all of Disney down, why would they think that bundled with smaller parts of the company, it can be ignored?

 

[the.dreamfinder]

Funny how when Wall St. gets into deal-making-mode with splitting companies and shifting debt to create entities greater than the whole, they seem to forget that the digital spin-off contains ESPN which they've been so down on. If they were recently harping on ESPN bringing all of Disney down, why would they think that bundled with smaller parts of the company, it can be ignored?

¯\_(ツ)_/¯
Nobody said the street was smart. This deal is dumb on many levels, the kind of split they propose is as well.

 

[SirLink]

Could Disney be split in half after a merger?
From The Hollywood Reporter’s Paul Bond and Georg Szalai
https://www.hollywoodreporter.com/news/will-disney-eventually-split-two-post-fox-merger-1065902

FWIW, I’d prefer if Disney acquired TimeWarner, since the ATT deal has a much higher likelihood of failure now with the DoJ lawsuit. TWDC keeps HBO and puts WB and Turner with ABC and ESPN to form a new company called, naturally enough, Warner Communications Corporation. This company is then IPO’d and TWDC takes the proceeds to either take itself private and/or make substantial long term investments into its existing and emerging lines of business.

Its not a merger its a buyout of assets. If this were to go through you'd have a new enterprise Sports International set up with Robert Murdoch in charge of that.

 

[the.dreamfinder]

Its not a merger its a buyout of assets. If this were to go through you'd have a new enterprise Sports International set up with Robert Murdoch in charge of that.

FOXA & FOXB shareholders get DIS stock, how is that not a merger? If they paid at least half in cash, that would be a buyout.

 

[SirLink]

FOXA & FOXB shareholders get DIS stock, how is that not a merger? If they paid at least half in cash, that would be a buyout.

Well they haven't bought it yet and Disney won't want all the assets Disney has stated. Disney are looking to pick and choose. Just analysts speculating that is all.

 

[doctornick]

It is reported as a stock transaction. That means they will give something like 1 share of Disney stock for about 4 shares of Fox. The only way for them to do that is using shares they own, i.e. treasury stock from previous buybacks. The exact value is a guess but since its reported as a 60 billion dollar deal including assuming Fox debt the best guess I have is a 4 to 1 trade. It could be 3 for 1 but that would value Fox well over 60 billion just for what they are buying with the existing owners still owning quite a bit.

I'm admittedly not that knowledgeable about this stuff, but wouldn't this be a good use of the stock buybacks that are so heavily criticized around here? If the company bought back shares of its own stock at lower prices (and they are now worth more) and it uses those previously purchased stocks to make a major acquisition, wouldn't that be the kind of "investing in the company' that people say doesn't happen due to buybacks?

Yes, I know many are down on the concept of simply buying IPs, but whether money is used to create new products versus buying existing ones, it's still tangibly increasing the assets of the company.

 

[seascape]

I'm admittedly not that knowledgeable about this stuff, but wouldn't this be a good use of the stock buybacks that are so heavily criticized around here? If the company bought back shares of its own stock at lower prices (and they are now worth more) and it uses those previously purchased stocks to make a major acquisition, wouldn't that be the kind of "investing in the company' that people say doesn't happen due to buybacks?

Yes, I know many are down on the concept of simply buying IPs, but whether money is used to create new products versus buying existing ones, it's still tangibly increasing the assets of the company.

Lets see, companies have only a few things they can do with profits. First they could give them all to stockholders in dividends. Second, they could invest directly into additions they do on their own. Third, they can give bonuses to employees. Fourth, they can make small purchases to grow the company, like Disney did with Bam Tech and someother additions. Fifth, they can buy stock back to hold forever or until a better use comes around.

The key decision has to be rate of return to the stockholders. If the profit margin on an internally run expansion is larger than what can be earned elsewhere the company should use the profit for that and not dividends. If the stock is undervalued and there is extra money after the regular dividend the company should think about a stock buy back or external purchase if something makes sense. Now in the future having treasury stock available opens up the ability for major mergers if they become available without the worry of needing a stockholders. Mergers that require voted of both companies shareholders have more risk of rejection and cost more money for the company acqiring the other company.

 

[2351metalcloud]

What do some of you all think about Fox/Disney selling back to Universal/Dreamworks the distribution rights they have for the Dreamworks movies Mr. Peabody & Sherman, Turbo, The Croods, How to Train Your Dragon 2, Penguins of Madagascar, Home, Kung Fu Panda 3, Trolls, The Boss Baby, and Captain Underpants: The First Epic Movie? Or maybe should they sell the rights to someone else like Paramount who has also distributed some Dreamworks movies?

To my understanding being a distributor of a movie may entail having the power to determine how a film is sold on disc and how a film appears on cable television programming and through internet streaming services. I imagine Fox/Disney could use this to their advantage by giving these movies unfavorable distribution through those means or possibly not allowing the movies to appear on tv or streaming. I don't know much about the laws or typical contracts about this stuff so maybe it wouldn't be allowed to just not allow the movie to be streamed or shown on tv, but I wouldn't be surprised if it was allowed for a company that owns those distribution rights to arrange things in a certain way so that the distribution of those movies is done in a way that is favorable to certain other movies the distribution company has made.

So, I'm thinking Fox/Disney could maybe arrange the distribution of those movies in a certain way that they don't receive much attention on tv and streaming services compared to some other movies made by Disney/Fox if the distribution rights that Fox for those movies includes working out how they appear on tv programming and streaming services. However, maybe I could be wrong about that. I'm not completely sure how it all works.

I think some people would get mad at Fox/Disney if they somehow stopped those movies from showing at all on tv/streaming services, if they stopped the sale of discs, or even if they just made it hard to buy discs or see them on tv/streaming services.

 

[seascape]

What do some of you all think about Fox/Disney selling back to Universal/Dreamworks the distribution rights they have for the Dreamworks movies Mr. Peabody & Sherman, Turbo, The Croods, How to Train Your Dragon 2, Penguins of Madagascar, Home, Kung Fu Panda 3, Trolls, The Boss Baby, and Captain Underpants: The First Epic Movie? Or maybe should they sell the rights to someone else like Paramount who has also distributed some Dreamworks movies?

To my understanding being a distributor of a movie may entail having the power to determine how a film is sold on disc and how a film appears on cable television programming and through internet streaming services. I imagine Fox/Disney could use this to their advantage by giving these movies unfavorable distribution through those means or possibly not allowing the movies to appear on tv or streaming. I don't know much about the laws or typical contracts about this stuff so maybe it wouldn't be allowed to just not allow the movie to be streamed or shown on tv, but I wouldn't be surprised if it was allowed for a company that owns those distribution rights to arrange things in a certain way so that the distribution of those movies is done in a way that is favorable to certain other movies the distribution company has made.

So, I'm thinking Fox/Disney could maybe arrange the distribution of those movies in a certain way that they don't receive much attention on tv and streaming services compared to some other movies made by Disney/Fox if the distribution rights that Fox for those movies includes working out how they appear on tv programming and streaming services. However, maybe I could be wrong about that. I'm not completely sure how it all works.

I think some people would get mad at Fox/Disney if they somehow stopped those movies from showing at all on tv/streaming services, if they stopped the sale of discs, or even if they just made it hard to buy discs or see them on tv/streaming services.

You have a good idea but I would not sell them to Universal but trade them for something Disney wants.

 

[AnotherDayAnotherDollar]

Comcast is out.

https://www.reuters.com/article/us-...leaving-disney-in-pole-position-idUSKBN1E52OM

At this point, I would be surprised if Disney doesn't buy the assets as reported by the media.

 

[IanDLBZF]

Thursday is the soonest we could be seeing this as a reality per CNBC.