Media giants set for battle after AT&T-Time Warner merger
Comcast and Disney fighting for control of Fox film studios and local sports networks
NEW YORK— Comcast made a $65-billion bid Wednesday for Fox’s entertainment businesses, setting up a battle with Disney to become the next mega-media company.
The bid comes just a day after a federal judge cleared AT&T’s takeover of Time Warner and rejected the government’s argument that it would hurt competition in cable and satellite TV and jack up costs to consumers for streaming TV and movies. The ruling signalled that Comcast could win regulatory approval, too; its bid for Fox shares many simi- larities with the AT&T-Time Warner deal. Comcast says its cash bid is 19-percent higher than Disney’s stock offer. The Wall Street Journal and others reported earlier that Comcast had lined up $60 billion in cash to challenge Disney for mogul Rupert Murdoch’s company.
The battle for Twenty-First Century Fox comes as traditional entertainment companies try to amass more content to compete better with technology companies such as Amazon and Netflix for viewers’ attention — and dollars.
If the Comcast bid succeeds, a major cable distributor would control even more channels on its lineup and those of its rivals. That could lead to higher cable bills or make it more difficult for online alternatives to emerge, though there is not yet evidence of either happening following other mergers. For Disney, a successful Comcast bid could make Disney’s planned streaming service less attractive, without the Fox video.
Content is becoming more important as ways to deliver content proliferate. Cable companies are no longer competing only with satellite alternatives, but also stand-alone services such as Netflix and cable-like online bundles.
Disney already started its own sports streaming service and plans an entertainment-focused one late next year featuring movies and shows from its own studios, which include Marvel, Pixar and “Star Wars” creator Lucasfilm.
With the Fox deal, Disney would get more content for those services — through the studios behind the Avatar movies, “The Simpsons” and “Modern Family,” along with National Geographic. Marvel would get back the characters previously licensed to Fox, reuniting X-Men with the Avengers. Comcast, meanwhile, has been leading the way in marrying pipes with the entertainment that flows through them. It bought NBCUniversal’s cable channels and movie studio in 2013 and added Dreamworks Animation in 2016.
The Philadelphia company has been tinkering with the traditional cable bundle, offering stand-alone subscriptions for some types of video along with smaller bundles of cable channels delivered over the internet. Comcast has said it will add Netflix to some cable bundles.
With Fox, Comcast would expand a portfolio that already includes U.S. television rights to the Olympics and comedy offerings such as “Saturday Night Live.”
Whichever company prevails would also control Fox’s cable and international TV businesses. That’s key for Comcast, which currently doesn’t have an international presence. The Fox television network and some cable channels including Fox News and Fox Business Network would stay with Murdoch’s family under either deal, as with the newspaper and book businesses under a separate company, News Corp.
Fox shareholders are set to vote on the Disney bid on July 10. Despite Comcast’s higher offer, it’s not immediately clear whether Fox’s board would entertain it. According to regulatory filings, an unnamed company, widely thought to be Comcast, previously made an offer for Fox. But Fox went with Disney because of concerns it would face more regulatory scrutiny with the other company.
That was before U.S. District Judge Richard Leon ruled in AT&T’s favour and rejected the government’s opposition.