There are reports Comcast is considering topping Disney's bid to purchase the bulk of 21st Century Fox. In December last year, Disney struck an unprecedented deal with 21st Century Fox that would see them purchase $52.4 billion worth of assets from the company. This would see Disney gain access to the Fox Vault for their digital streaming services; Marvel Studios would regain the X-Men; and the Avatar franchise was seen by Disney as the "crown jewels" of the purchase. Meanwhile, Fox would be able to exit a market they felt they lacked the digital reach to remain competitive in. Rupert Murdoch reportedly intended to focus his business on news and sports coverage.
Since December, most moviegoers have treated this as something of a done deal. Although the purchase has been referred to regulators, and will likely take another 11 to 17 months to be approved, President Trump had publicly congratulated Disney on the proposal. There seemed to be few obstacles. In reality, however, the purchase is far from approved. It's still conceivable that regulators could intervene, especially with concerns over antitrust laws.
Meanwhile, CNBC has reportedly spoken to Comcast insiders who are considering topping Disney's offer. CNBC add that Disney is already preparing for the eventuality. It's important to understand that the Disney purchase is set against a troubled regulatory backdrop. The Justice Department has sued to block AT&T's acquisition of Time Warner, an approach few had expected. Tech companies like Netflix and Amazon continue to expand in terms of original content. Meanwhile, traditional media businesses are finding it difficult to break into the digital space. Leo Hindery, managing partner of InterMedia Partners, explained to CNBC:
"For the first time, I don't understand what's possible regulatorily when it comes to horizontal integration or to vertical integration, and even whether or not behavioral remedies will be meaningful again. There are now inconsistent strategies from company to company and people are stepping every day into each other's sandboxes."
Every company is struggling to work out the best way to proceed. For Comcast, there are hopes that an unsolicited offer to purchase the Fox assets would be a game-changer. Murdoch reportedly chose Disney over Comcast because he feared regulatory interference, but a good enough offer could persuade other shareholders to vote against him. Comcast is particularly interested in Fox's global reach, which they see as a tremendous boost.
Whatever the future may hold for the Disney purchase, it's clear that every media company is coming to recognize a basic truth: The future of film and television is online, and only the companies who can compete in this new environment will truly flourish. Fox is choosing to get out of the game, and as a result two powerful companies see an opportunity to expand and grow. Whoever wins in the end, Hollywood will never be the same again.
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