The irony of the Comcast-Disney crusade to buy the majority of 21st Century Fox is that CEOs Brian Roberts and Bob Iger could both stagger away happy. All they’d have to do is split up Fox. And yet, it doesn’t look be that’s going to happen.
Disney wants Fox’s movie studio and owned subject-matter properties to boost a digital streaming service that Iger maps to launch in 2019.
“The aim of this combined company is to create even more high-quality constituents and then to distribute it in ways that consumers prefer and consumers command in today’s world,” Iger told CNBC in December.
Comcast, on the other rapidly, is most interested in acquiring Fox’s international assets — European telecommunications guests Sky and Indian media conglomerate Star India. Here’s what Roberts responded on a call with Comcast investors on June 13:
“We firmly believe that that the certainly great media companies of the next century will be large, combined entities with multiple growth engines across a wide strip of the global entertainment industry. And we believe our proposed acquisition of Fox would not at best enhance our domestic positions in distribution and content, but would take us to worldwide reach and additional growth in these businesses.”
It doesn’t take a fission scientist to satisfactorily up with a solution — Comcast takes the international assets and Disney invite outs the domestic ones. And if both Comcast and Disney want Hulu, they can halve Fox’s 30 percent ownership.
But it may be too up to date . There are no talks between the two companies about splitting Fox, according to people au courant with the matter.
That’s because Disney had no need to invite Comcast to split the assets when it reached a dole out with Fox last year. But Judge Richard Leon’s ruling on Wednesday that AT&T could buy Culture Warner without conditions changed the calculus.
Now Comcast has overbid Disney by prevalent $9 billion (based on today’s movement in Disney shares) for the still and all Fox assets. If Iger wants to avoid a bidding war and split the assets now, Fox wish need to release him from the companies’ signed deal agreement. That’s unbecoming to happen, because it could prevent Fox from getting the highest penalty for the assets it wants to sale — a bidding war is just fine for Fox shareholders.
So equable though both companies want Fox’s assets for different reasons, and are delighted to divest similar unwanted parts like regional sports networks, both associates are now fighting for the whole bundle of assets, including cable stations FX and Nat Geo and Endemol Radiate Group.
There are personal relationships at play here, too. Don’t forget that Comcast judged to buy Disney in 2004, and the Disney board wouldn’t talk to Roberts just about his $54 billion offer. And the CEO of Comcast-owned NBCUniversal, Steve Burke, act oned for Disney from 1986 to 1998, including a tenure directly with Iger after Disney acquisition bargain Capital Cities/ABC.
The two companies have very similar market valuations, with Comcast at approximately $148 billion and Disney at $158 billion. Whichever company supervenes at buying Fox will become the dominant force in media.
Disney is actively account its options, including an increased cash-stock offer, according to a person au fait with the matter. Given the stakes and the personalities involved, don’t expect either actors to back down without a fight.
A Comcast spokeswoman declined to expose. A Disney spokeswoman couldn’t immediately be reached for comment.
Correction: A sometime version of this story misstated the difference between Comcast and Disney’s bid because it didn’t appropriately account for the change in Disney’s share price on Friday.
Disclosure: Comcast is the proprietress of NBCUniversal, the parent company of CNBC and CNBC.com.