More megamerg­ers

Com­cast made a $65 bil­lion bid Wed­nes­day for Fox’s en­ter­tain­ment busi­nesses.

The Oklahoman - - BUSINESS - BY MAE AN­DER­SON AP Tech­nol­ogy Writer

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&TTime Warner deal.

Com­cast says its cash bid is 19 per­cent higher than the value of the Dis­ney 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.

“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.”

More con­tent, stream­ing com­pe­ti­tion

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.

The Philadel­phia com­pany has been tin­ker­ing with the tra­di­tional ca­ble bun­dle, of­fer­ing stand­alone 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.


Com­cast is mak­ing a $65 bil­lion bid for Fox’s en­ter­tain­ment busi­nesses, set­ting up a bat­tle with Dis­ney to be­come the next mega-me­dia com­pany.

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