Disney will acquire 21st Century Fox assets for $70B after Comcast drops bid

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Disney has won the battle for 21st Century Fox, with Comcast surrendering the field to Apple's ally.

Comcast Fox deal


Bringing to an end a bidding war between two of the world's leading entertainment conglomerates, Comcast has announced that it's giving up on purchasing the 21st Century Fox assets from News Corp., paving the way for the Walt Disney Company to buy them.

"Comcast does not intend to pursue further the acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky," Comcast CEO Brian Roberts said in a statement. "I'd like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company."

The assets purchased include Fox's movie and TV studios, the FX cable networks, and the Fox regional sports networks. Other Rupert Murdoch-owned assets, such as Fox News, the Fox TV network, and newspapers, will remain part of News Corp. Murdoch, ironically, has made multiple attempts to the past to purchase Sky TV.

The Disney acquisition will require approval of government regulators, although it already cleared one hurdle. The Trump Administration has opposed, with little success, the recent acquisition of Time Warner by AT&T.

The history of the battle

The saga began in November 2017 when initital reports stated that Disney was in talks to buy Fox's movie and TV studio assets. A large percentage of the initial media coverage centering on what the deal meant for the different superheroes (X-Men, The Avengers) that might be brought into the same fictional universe.

Disney announced in December of last year that it had indeed bid to acquire the Fox assets for $52.4 billion. In June, Comcast made a $65 billion all-cash bid to beat out Disney for the deal.

Disney came back with an offer that exceeded $70 billion that same month.

While Fox shareholders were scheduled to vote later this month, Comcast backed out on Thursday.

Apple and 21st Century Fox

The outcome of the deal appears to favor Apple, as the company has long enjoyed strong ties with Disney, from Steve Jobs' involvement with Pixar to Disney CEO Robert Iger's seat on the Apple board of directors. Apple recently made iPhones and other training materials available to Disney for a "#DreamBigPrincess" video project.

On the other hand, the Fox deal will bring a huge new amount of content to Disney's upcoming streaming service, which will provide even stiffer competition to Apple's own content plans.

Some speculation has had Apple, amidst the current wave of media consolidation, moving to purchase a studio or distributor themselves.

Comments

  • Reply 1 of 17
    nunzynunzy Posts: 662member
    Apple is already very connected with Disney. They should buy Disney.
  • Reply 2 of 17
    anantksundaramanantksundaram Posts: 19,149member
    A bunch of yesterday-companies hoping to reinvent themselves to try and compete in the Netflix world. 

    It won't be easy. Too much legacy that they'd be unwilling to let go.
  • Reply 3 of 17
    tallest skiltallest skil Posts: 43,399member
    And then there were five.
    A bunch of yesterday-companies hoping to reinvent themselves to try and compete in the Netflix world. 
    The thing about which I care most is getting the fucking copyright laws FORCIBLY LIMITED, and even perhaps reverted. Then we can destroy Netflix, too.

    edited July 2018
  • Reply 4 of 17
    anantksundaramanantksundaram Posts: 19,149member
    Then we can destroy Netflix, too.
    Why should Netflix be "destroyed"? And what's the copyright issue with them -- I don't follow.
  • Reply 5 of 17
    I can't wait for the X-men to join the Marvel cinematic universe.
  • Reply 6 of 17
    SoliSoli Posts: 8,802member
    Then we can destroy Netflix, too.
    Why should Netflix be "destroyed"? And what's the copyright issue with them -- I don't follow.
    I have no clue what issues he has with Netflix, but here's a video that may better explain what Disney did to copyright law to hypocritically protect its own assets at the expense of creativity.


    ronn
  • Reply 7 of 17
    nunzynunzy Posts: 662member
    Then we can destroy Netflix, too.
    Why should Netflix be "destroyed"? And what's the copyright issue with them -- I don't follow.
    Netflix competes with Apple's streaming services. They are a danger to Apple.
  • Reply 8 of 17
    stanthemanstantheman Posts: 319member
    nunzy said:
    Then we can destroy Netflix, too.
    Why should Netflix be "destroyed"? And what's the copyright issue with them -- I don't follow.
    Netflix competes with Apple's streaming services. They are a danger to Apple.
    Every app/service competes with Apple’s native apps/services, and Netflix is only a single example. Most importantly, people buy iPhones and iPads to use those other apps — including Netflix. So there is a high degree of complememtarity between Apple and Netflix, even though Netflix does compete against Apple’s barely-existent video services. Overall, Netflix is not Apple’s enemy or competitor.
    edited July 2018 zoetmbnunzy
  • Reply 9 of 17
    zoetmbzoetmb Posts: 2,444member
    Disney's pushing to extend copyrights is a mixed bag.   In 1979, they got the law extended by telling Congress that if they didn't extend the law, someone could make a porno featuring Mickey Mouse and the idiots in Congress fell for it.   (Since a porno could be considered satire, someone could do it anyway).    On the other hand, works that fall into the public domain are not treated well because companies are afraid to expend the resources to publish them because once they do, if they're even moderately successful, other companies will come along and compete.   Check out your local bookstore (if you still have one).  Aside from Shakespeare, Dumas, Victor Hugo, some Edgar Rice Burroughs, Edgar Allan Poe and a few others, you won't find a lot of public domain works because of that very reason.  Even online, public domain works that someone turned into e-books are awful - they're usually just horribly laid out raw text.

    Meanwhile, Congress still won't force U.S. over-the-air radio to pay performance royalties (they only pay publishing rights to the composers via ASCAP, BMI and SESAC).  There is a proposal before Congress to amend the copyright law to extend to pre-1972 recordings, which it doesn't cover today, but with everything going on in Congress, it looks like it might not be addressed this session and they'll have to start over again next session.   

    But let's say that Congress doesn't extend the copyright law for movies.  So "Steamboat Willie" and some other films fall into the public domain.  How does that really help anyone?  All that will happen is that a bunch of low-budget DVD companies will put out crappy copies of it and similarly crappy copies will show up on Netflix and other streaming services.   And then the companies that do a great job of restoring films, like Criterion and others, might not survive.    

    My problem with Disney buying Fox isn't the copyright issue -- it's that I don't like to see such consolidation of assets.  That happened in the record industry and it's really hurt the quality of music (IMO) with just Sony, Universal and Warner as majors    It could also raise ticket and media prices as Disney will have ownership of so much content and they've already tried to play hardball with theaters.   There's a controversy right now with the remaining drive-ins because Disney is demanding a three-week window, which will put them out of business.  

    As for Apple buying a studio - it might be too late.  The only non-tiny studio left is Paramount and most of the Paramount slate is co-productions or distribution deals.  There's also Lionsgate which is owned by a bunch of investment firms, but the entire Lionsgate library is fewer than 400 films and lots of those are co-pros.   But maybe in 5-10 years, when AT&T finds out it knows nothing about running Warner Bros. and is destroying the company, it will sell that to Apple.    (AT&T buying Warner concerns me much more than Disney buying Fox).  
    edited July 2018 ronn
  • Reply 10 of 17
    zoetmbzoetmb Posts: 2,444member
    nunzy said:
    Apple is already very connected with Disney. They should buy Disney.
    Assuming a 20% premium, Apple could buy Disney for about 21% of Apple's current market cap.   I think Disney is a bargain right now - the stock really hasn't moved in spite of the fact that the amusement parks are doing well and most of Disney's films (except for Solo) have done extraordinarily well and the pending acquisition hasn't seemed to move the stock either   The other soft spot is ESPN, but most of the other TV and cable properties do well.     

    But does Apple want to be in the amusement park and cruise ship business?   I suppose they could spin off that business, but the parks are very dependent upon Disney's IP, although I suppose an Apple owned Disney could license that out.    But Murdoch would have to support it because I'm pretty sure he becomes the largest Disney stockholder, although that's also been previously said about Jobs (after selling Pixar) and Lucas (who got half stock and half cash).   If Apple did buy Disney (which includes the Muppets, Pixar, Lucasfilm, Marvel and now Fox), they'd wind up with a 3000-film library, although more than half of it probably has little value in today's world.  
    nunzy
  • Reply 11 of 17
    anantksundaramanantksundaram Posts: 19,149member
    nunzy said:
    Then we can destroy Netflix, too.
    Why should Netflix be "destroyed"? And what's the copyright issue with them -- I don't follow.
    Netflix competes with Apple's streaming services. They are a danger to Apple.
    That would be a pretty dumb argument.
    edited July 2018 nunzy
  • Reply 12 of 17
    maestro64maestro64 Posts: 4,562member
    Comcast just forced Disney to over pay for Fox assets, they had no real intention on buying Fox, they knew the Government would not allow it.

    It is the same thing Comcast did to Time Warner when rumors were circulating Apple and Time Warner was working on the idea of eliminating the STB and replace it with and ATV which allow Time Warner to sell subscriptions to anyone with a broadband connection even if Time Warner did not have a physical presents. You are now seeing it happen with DTV and Charter who offer a streaming only service via an ATV and subscription to one of those services. There are people in NYC who could not put up a DTV dish who now can get DVT service via their ATV. Comcast wanted to delay this so they could offer their competing service, they did not want Apple and its competitors to get a 3 or 4 yr head start on them. When Comcast put their bid offer to Time Warner, TW has to stop its conversation with Apple.

    I think Comcast is up to its tricks and delay tactics yet again and Disney is now paying for it.
    edited July 2018
  • Reply 13 of 17
    tallest skiltallest skil Posts: 43,399member
    Why should Netflix be "destroyed"? And what's the copyright issue with them -- I don't follow.
    Sorry for the confusion; I didn’t mean that they apply to the main copyright battle. I just don’t like the company ideologically.
  • Reply 14 of 17
    entropysentropys Posts: 1,698member
    Then we can destroy Netflix, too.
    Why should Netflix be "destroyed"? And what's the copyright issue with them -- I don't follow.
    I had t seen that chart before. Quite telling about the establishments cosy little arrangement.
    The copyright issue is a clear example of the corporatism alive and well in western governments today. When people rail against capitalism, it is really this kind of corporatism they are complaining about. The market doesn’t particularly care one way or another about the mouse, but Big Business Disney does, and has regularly stitched up favours with their mates in Big Government to protect its revenue from Mickey. Your market has been corrupted by corporatism.  The other Tri-umpherate member, Big Union, was probably in there too facilitating the deal with their mates too.

    back on topic. This sort of consolidation and reduction in competition will be bad for america in the long run. The proper role of government here should be to prevent it.
    tallest skil
  • Reply 15 of 17
    maestro64 said:
    Comcast just forced Disney to over pay for Fox assets, they had no real intention on buying Fox, they knew the Government would not allow it.

    It is the same thing Comcast did to Time Warner when rumors were circulating Apple and Time Warner was working on the idea of eliminating the STB and replace it with and ATV which allow Time Warner to sell subscriptions to anyone with a broadband connection even if Time Warner did not have a physical presents. You are now seeing it happen with DTV and Charter who offer a streaming only service via an ATV and subscription to one of those services. There are people in NYC who could not put up a DTV dish who now can get DVT service via their ATV. Comcast wanted to delay this so they could offer their competing service, they did not want Apple and its competitors to get a 3 or 4 yr head start on them. When Comcast put their bid offer to Time Warner, TW has to stop its conversation with Apple.

    I think Comcast is up to its tricks and delay tactics yet again and Disney is now paying for it.
    Not really. Disney pays in stock. So all that happens is that Disney/fox will be owned to a larger degree by fox shareholders than before. The combined companies' debt etc. Is not going to be affected. So Comcast will compete against the same type of company afterwards. Bidding to hurt someone would only matter if they were trying to hurt some current Disney shareholder.
  • Reply 16 of 17
    NotsofastNotsofast Posts: 378member
    A bunch of yesterday-companies hoping to reinvent themselves to try and compete in the Netflix world. 

    It won't be easy. Too much legacy that they'd be unwilling to let go.
    It's actually Netflix that is worried.  What people don't understand is that there is nothing unique that Netflix has other than a head start.  They are all bidding for the same talent, studios, etc., to produce "original" content for them to distribute; hence Netflix's cost keep rising as it is now bidding against the likes of Sony, Amazon, Hulu, HBO, and now Apple and Disney.  Netflix is in a precarious position because it is a one trick pony and can't keep raising prices to keep up with ever increasing costs.  Apple, Google and Amazon don't have to "make money" directly on their video streaming and Disney has a broad array of revenue centers to leverage streaming and content with, such as advertisement, etc., and all have deeper pockets than Netflix to dip into to bid against Netflix.  It's a fantastic time for the talent to have all of these corporate behemoth's bidding to sign you up to make or star for them in a series or movie, but Netflix is in worst position to deal with the cost side of that situation.

    Kudos to Netflix for realizing early on that they needed to develop original content to remain viable, but keep in mind that five years ago they only had about a dozen original content shows, Apple is already ahead of where Netflix was at the same stage. 


  • Reply 17 of 17
    SpamSandwichSpamSandwich Posts: 31,089member
    Notsofast said:
    A bunch of yesterday-companies hoping to reinvent themselves to try and compete in the Netflix world. 

    It won't be easy. Too much legacy that they'd be unwilling to let go.
    It's actually Netflix that is worried.  What people don't understand is that there is nothing unique that Netflix has other than a head start.  They are all bidding for the same talent, studios, etc., to produce "original" content for them to distribute; hence Netflix's cost keep rising as it is now bidding against the likes of Sony, Amazon, Hulu, HBO, and now Apple and Disney.  Netflix is in a precarious position because it is a one trick pony and can't keep raising prices to keep up with ever increasing costs.  Apple, Google and Amazon don't have to "make money" directly on their video streaming and Disney has a broad array of revenue centers to leverage streaming and content with, such as advertisement, etc., and all have deeper pockets than Netflix to dip into to bid against Netflix.  It's a fantastic time for the talent to have all of these corporate behemoth's bidding to sign you up to make or star for them in a series or movie, but Netflix is in worst position to deal with the cost side of that situation.

    Kudos to Netflix for realizing early on that they needed to develop original content to remain viable, but keep in mind that five years ago they only had about a dozen original content shows, Apple is already ahead of where Netflix was at the same stage. 


    Right. Quality original content creators are in the best position of their lives right now.
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