Crashing the Wedding: Comcast vs Disney
People in UK were celebrating, as Meghan Markle and prince Harry got married. They had the perfect Disney wedding. Gorgeous white dress and a beautiful couple adding to the fact that this was a real "Royal" wedding. Things were not looking so merry for Disney itself. The mass media company was on it's way towards a takeover of 21st century Fox. However, while it waited for regulatory approval, Comcast, the American global telecommunications company, hinted towards a better bid (compared to Disney's) for Fox. And this is not even the half of it.
Disney and Fox-
Once upon a time....is how most Disney movies start. So, it seems only fitting to start the story of Fox and Disney with it. Once upon a particular August in 2017, Rupert Murdoch (21st Century executive chairman) and Bob Iger (Disney CEO) met in Los Angeles. At some point during this meeting, the idea of a possible "strategic transaction" came up. Not much time later officials from both companies were meeting up to see if an acquisition would be possible and looking into all details. They discussed what parts of Fox, Disney would be purchasing and had discussions about possible taxes and the works.
Bumpy ride-
However, since the start there has always been some other bidder willing to pay more. Just a few days after the original meeting of Rupert and Bob, 21st century Fox met with representatives from Verizon, a telecommunications company, to discuss an acquisition deal. In November, Disney put up a bid for much of the Hollywood holdings of 21st Century Fox, only to be upped by Comcast with a higher bid. Disney responded with an even higher one and the talks between Fox and Disney resumed. Verizon, Comcast and Disney were all in talks with "the sly Fox" until Verizon was dropped by the Fox board. This left the competition between Disney and Comcast. Finally towards the end of 2017, Disney and Fox announced a deal. Disney would be buying the 21st Century’s entertainment assets for $67 billion, while "New Fox" (as the remainder would be called) would hold on to its news and sports brands. It seemed as if Disney would finally get it's happily ever after.
Not over yet-
Just as Disney and Fox were about to exchange their vows (waiting for regulatory approval), Comcast came in to crash the wedding (planning to put in a higher bid). But that's not the whole story. One missing element is Sky, the pan-European media and telecommunications company. 21st century Fox already owned some 39 percent of Sky, and announced plans for a takeover of the rest of the 61 percent long time ago. However, regulators weren't having it. They thought that if Fox purchased sky it would have too much power over the media. So, while Fox waited for any (unlikely) approval, Comcast made an even higher bid for Sky as well. But, the real story unveils when Disney gets involved here too. In Disney's agreed deal with Fox, it was to buy Fox's original share of Sky as well. And Fox also agreed to sell the whole of Sky to Disney after it had bought it. Comcast is hoping to (easily) acquire Sky, snatching it right under the Fox's nose. It seems as if things just keep getting complicated in this relationship.
Why is all of this happening now?
Cable TV and traditional media companies have been shook by the streaming services provided by the likes of Netflix, Hulu or Amazon Prime recently. Netflix in particular has taken away millions of households right under the noses of these companies. That is why in order for them to compete with the likes of Netflix, they need to add more content to their collections. All traditional media outlets underestimated the power of online streaming and had previously given rights to many of their shows and movies to existing services. However, now many of them have finally come to realize the true meaning of streaming services being "cord-cutters". So, Disney in particular could use the extra content to help fuel its upcoming streaming service. That's right, Disney announced that it will be releasing it's very own streaming service towards the end of next year. It will have all Disney movies ever released, all movies that Disney had bought (like Marvel and Star Wars) and in addition to that original content especially made for the service. Netflix will definitely be facing some heated competition soon.
If Disney gets the cake-
Until recently, fans of Disney and critics had all been assuming that the deal with Fox (most likely) would be going through. So, there has been a lot of talk mainly on the internet but also on other media sources (old people things like "news on the TV" or the vintage "newspaper"). Countless memes have been floating all over the internet, some of them positive while others not so (all are hilarious). Fans of Disney and its brands like Marvel and Star Wars are even anticipating any future crossovers from Fox owned movies. Also as Netflix became the most valuable media company for a while just a few days ago (crossing Disney) it could be in Disney's advantage to get full control of streaming company Hulu. Hulu is currently owned by Disney, Fox and Comcast equally. Under the deal, Disney would get a majority ownership in it. However, the critics have also made themselves quite loud. Whether that is good for Hulu is debatable but it's definitely going to help Disney get back on track. Many people also think that Disney buying Fox would be giving Disney enough clout to reconfigure the theatre business. In 2016, Disney and Fox combined made up around 40 percent of the theatrical business. All that power in one mouse hand may seem too risky.
What if Comcast wins?
Comcast has said that it's all cash offer for Fox would be higher than Disney's bid and will be coming shortly. However, Comcast itself is awaiting regulatory approval to purchase At&t (an American telecommunications company) and has said that it will not be bidding for Fox until the deal is approved. It has also made it clear that it will not be bidding for Fox if the deal is not approved. If even after all that Comcast is able to purchase Fox it will not be any less controversial. Comcast made history when it bought NBCUniversal not long time ago. With the likes of Universal studios under Comcast's belt there is even speculation that if it got Fox it would become even much larger than Disney with Fox.
So is it going to be Comcast or Disney?
All that being said which of these giants will take a bite out of the fox? As of now it looks like Disney might take it. The number one reason for that would be that Fox supports the Disney deal even after Comcast offered to pay more. There is a much larger chance of authorities letting the Disney deal pass compared to Comcast (since it's already in the regional sports news business). In addition to that while Comcast is willing to pay more, Disney is going to be paying in shares which could be of much larger value in the future. The battle is not over yet though and while Comcast may be offering the "dough" it seems like a future Xmen and Avengers crossover is more valuable to most of us. Lets just hope that the wedding goes alright.