Disney wins U.S. OK on Fox assets

Comcast may fight for Murdoch empire’s entertainment assets.

Walt Disney Co. won U.S. antitrust approval for its $71 billion purchase of 21st Century Fox Inc.’s entertainment assets, raising hurdles for a potential rival bid from Comcast Corp.

Disney agreed to sell Fox’s 22 regional sports networks to resolve the Justice Department’s concerns that the deal would raise prices for cable sports programming in local markets, the department said Wednesday.

The approval is a victory for Disney in its battle with Comcast for one of the media industry’s biggest prizes. Fox last week accepted a sweetened bid from Disney, which upped its offer following Comcast’s competing $65 billion bid. The $38-a-share price is about $10 a share higher than what Disney offered in December — and $3 above Comcast’s bid.

Comcast still has time to respond. Fox canceled a shareholder meeting to vote on the Disney deal that had been planned for July 10.

Comcast is now mulling its next steps, including possibly teaming up with private equity investors in its pursuit of Fox assets, a person familiar with the situation said on Wednesday. Wall Street expects the cable giant to come back with a counterbid.

“Today’s settlement will ensure that sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution,” said Makan Delrahim, the head of the department’s antitrust division.

Disney rose to a session high after Bloomberg reported that the government clearance was imminent, climbing as much as 1.6 percent to $105.88. Fox gained up to 2.5 percent, while Comcast was little changed.

If the bidding reaches a high enough level — say, $90 billion — the company may go to private equity firms or other backers for help, the Wall Street Journal reported earlier. In one scenario, a strategic investor could take on Fox’s U.S. assets — including the 20th Century Fox studio and regional sports networks — and leave Comcast with overseas assets.

Disney must sell the regional sports networks to a buyer acceptable to the U.S. within 90 days of closing on the Fox deal.

The Disney-Comcast contest will determine who controls much of Rupert Murdoch’s empire, including Fox’s movie and TV studios, television networks such as FX, and multichannel providers like Star India and Sky Plc. At stake is a trove of media properties ranging from “The Simpsons” to “X-Men.”