Comcast challenges Disney with a $65 billion bid for 21st Century Fox.
NEW YORK — Comcast made a $65 billion bid Wednesday for 21st Century Fox 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 over the government to buy Time Warner.
The offer sets up a battle of wills between two of the most dominant and deep-pocketed entertainment companies in the world — Walt Disney, which proposed a $52.4 billion offer for Fox last year, and Comcast, the nation’s leading cable company, which already owns Universal Studios and NBC.
Such merger proposals are unlikely to be the last to be announced in the coming months, analysts said. The stocks of entertainment companies soared Wednesday, as investors grew giddy at the prospect of big conglomerates buying ailing film and television studios.
The impetus to own content has become even more urgent as technology has disrupted the traditional ways consumers get shows and movies. Americans increasingly are consuming entertainment on their smartphones or over high-speed internet connections, rather than on living-room televisions plugged into cable outlets. And the coming advent of a new ultrafast wireless technology called 5G is expected to accelerate the trend.
That has left cable, telecoms and tech giants urgently searching for premier content they can control. Beyond AT&T and Comcast, Apple, Google and Amazon have all moved into producing or buying original programming. Meanwhile, Disney is planning to launch a streaming app that will enable it to reach consumers directly and compete with companies such as Netflix.
“We’re dealing with huge companies that have the financial value greater than some countries,” said Mary Ann Halford, a global media strategist at OC&C Strategy Consulting, said of tech giants moving into entertainment. “If (legacy entertainment) companies newspaper industry.”
Whether the moves by all of these companies into each other’s businesses impacts the shows themselves remains to be seen. Many independent producers fear that 21st Century Fox would see changes once in the hands of Comcast or Disney, both of which have stressed big tentpole franchises more than films outside popular culture.
Some companies have worried whether the government would block some of these deals. But such concerns are waning in the wake of AT&T’s win in court over
Its fight with Disney will play out in real time over the next week as Fox readies for a scheduled board meeting on June 20 at which the issue will be raised. A meeting with 21st Century Fox shareholders on July 10 to discuss the offers will further cement the company’s fate.
The original agreement between Disney and Fox in December called for Rupert Murdoch’s company selling many of its assets, including his film and television studios, National Geographic, a 30 percent stake in Hulu and its 39 percent stake in European cable giant Sky to Disney. Many analysts now expect Disney to raise its offer.
But more than money distinguishes the competing bids from Comcast and Disney. By adding shows like “This Is Us” and movie franchises like “Avatar” to its rich stable of Star Wars, Pixar, and Marvel movies, Disney would gain a commanding position in the entertainment world, enabling it to better dictate terms to theater and cable companies and entice millions to subscribe to its upcoming streaming service.
A worker stands near a gate for Fox Studios, the subject of a bidding war, in West Los Angeles.