Comcast enters bidding war with Disney for a piece of Fox
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 signaled that Comcast could win regulatory approval, too; its bid for Fox shares many similarities with the AT&T Time Warner deal.
In what is expected to be the first of many attempts to buy up pieces of the entertainment world after AT&T’s decisive legal victory, Comcast says its cash bid is 19
percent higher than the value of Disney’s offer as of Wednesday. The Wall Street Journal and others reported earlier that Comcast had lined up $60 billion in cash to challenge Disney for media mogul Rupert Murdoch’s company. Disney’s offer was for $52.5 billion when it was made in December, though the final value will depend on the stock price at the closing.
Fox late Wednesday confirmed that it had received the new Comcast offer and that the board “will carefully review and consider the Comcast proposal.”
The Walt Disney Co. did not immediately respond to a request for comment.
“This is a golden offer that will put considerable pressure on [Disney CEO Bob] Iger and Disney to step up their game on another bid,” GBH Insights analyst Dan Ives said. “This is even higher than the Street thought, which speaks to Comcast really wanting these key assets.”
“Disney can compete financially with Comcast,” Michael Nathanson, research analyst with the MoffettNathanson LLC firm, said on Wednesday. “The question is will. Does (Disney’s) Bob Iger have the will to follow (Comcast’s) Brian Roberts, you know, onto the beach on Normandy?”
Mr. Nathanson and his partner, Craig Moffett, said Disney may have more financial resources to do a deal. But Mr. Moffett added that “Bob Iger is more beholden to shareholders than Brian Roberts” — because of Mr. Roberts’s super-voting shares in Comcast.
“We know from the personalities involved there will be blood on the floor somewhere,” Susan Crawford, professor at Harvard Law School and author of Captive Audience about the Comcast/NBCUniversal merger. “It’s clearly going to be a battle of male wills. These are guys who are used to being in control and want their way and will do about anything to get it.”
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 like Comcast are no longer competing only with satellite alternatives such as DirecTV, but also stand-alone services such as Netflix and cablelike online bundles through Sony, AT&T and others.
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.