×
You will be redirected back to your article in seconds

Decisive AT&T Victory Sets Stage for Comcast to Challenge Disney for 21st Century Fox Assets

Your move, Comcast.

The decisive win for AT&T in the anti-trust trial over its $85.4 billion acquisition of Time Warner sets the stage for Comcast to mount an aggressive bid for the 21st Century Fox assets that are at present set to be acquired by Disney for $52.4 billion.

Comcast leaders have been plotting a counter-offer for the 21st Century Fox assets ever since Rupert Murdoch and Bob Iger confirmed their nuptials on Dec. 13. Comcast made a point of telling Wall Street that it would wait until the AT&T-Time Warner ruling to make its final decision.

In the wake of U.S. District Court Judge Richard Leon’s ruling in favor of AT&T — in a 172-page opinion that deftly examines how the rise of streaming giants and steady increase in cord-cutting has reshaped the pay TV marketplace in just a few years — Comcast is expected to formally unveil its bid as early as Wednesday.

But the company has been working round the clock to get into deal mode with an intensity that suggests a bid was coming no matter how the judge ruled. Comcast has been busy arranging the financing for an all-cash bid expected to be at least $60 billion. It has also been working with lawyers and lobbyists to build the case to be made to regulators about why the cable giant should be allowed to expand its content production and distribution infrastructure and add the FX Networks and National Geographic Partners cable channels.

Comcast will hammer on the fact that its cable systems division is at heart a regional service with 22.3 million video customers and 26 million broadband subs. In a country of 120 million households, that hardly counts as a competitor-squeezing monopoly. AT&T also has much more of a national footprint with its wireless telco services and the DirecTV service, which is available nationwide in contrast to Comcast’s cable infrastructure.

Another big component of Comcast’s argument is that the Fox assets in question derive 70% of their revenue from markets outside the U.S. Comcast will point to this as a sign that the Fox deal would not give the company that much more market share on the domestic front. 21st Century Fox’s most domestically-focused assets — Fox Broadcasting, Fox News and Fox Sports — are not part of the sale to Disney.

Fox’s strong presence in international TV — notably through India’s Star TV and the U.K./Euro provider Sky — are a huge part of the appeal of the deal for Comcast. Comcast and NBCUniversal at present only take in about 9% of total revenue from outside the U.S., making diversification in overseas markets a huge priority.

Toward that end, Comcast already is in the midst of fielding a separate offer for all of Sky. Fox at present owns 39% of the company and is trying to close a deal for the remaining shares. Fox’s 39% stake is part of the assets Disney hopes to buy. Comcast in late April unveiled its separate offer for Sky, a move that was seen as a precursor for the bigger battle to come.

Having Comcast absorb Fox’s 22 regional sports networks could be a bigger red flag for regulators. Comcast is prepared to divest some of them or let them go entirely. Comcast also owns nine RSNs. Comcast will note that two-thirds of Fox’s channels are outside Comcast’s cable footprint — which means the company will have to negotiate carriage deals with rival MVPDs just like any other content owner.

On the film side, Comcast will argue that the combination of 20th Century Fox and the Universal Studios operation will result in smaller market share of the domestic box office than the combo of Fox and Disney.

More Biz

  • Abigail Disney on Bob Iger

    Abigail Disney Calls Bob Iger's $65 Million Compensation 'Insane'

    Disney chairman-CEO Bob Iger’s total compensation for Disney’s fiscal 2018 was a whopping $65.6 million. Abigail Disney, the granddaughter of Disney co-founder Roy Disney, calls that sum “insane.”  While speaking at the Fast Company Impact Council, the filmmaker and philanthropist insisted that this level of corporate payout has a “corrosive effect on society.” Disney took [...]

  • Contract Placeholder Business WGA ATA Agent

    Signs of Solidarity and Strain Emerge as Week 2 of WGA-Talent Agency Standoff Begins

    Hundreds of WGA members rallied solidly behind their union last week as the industry grappled with uncertainties spurred by the sudden break between writers and their talent agency representatives. But as the standoff heads into its second week, signs of strain among some WGA members are beginning to emerge. Shalom Auslander, author and creator of [...]

  • Woodstock 50 Festival Postpones Ticket On-Sale

    Woodstock 50 Festival Postpones Ticket On-Sale Date

    UPDATED: The troubled Woodstock 50 festival has run into more difficulties, as multiple sources told Variety late Friday that the April 22 on-sale date for the event has been postponed. Agents for artists scheduled to perform at the festival — which include Jay-Z, Dead & Company, Chance the Rapper, Miley Cyrus, Imagine Dragons and Halsey [...]

  • National Enquirer - Jeff Bezos

    Hudson Media CEO James Cohen Purchases the National Enquirer

    Hudson Media’s CEO James Cohen announced Thursday that he will purchase the National Enquirer as well as American Media’s other tabloids, the Globe and the National Examiner. With the purchase of the National Enquirer, which Cohen reportedly bought for $100 million, he plans to strengthen their collaborative efforts, documentary shows, weekly podcasts, and theme parks. [...]

  • Amazon

    Amazon Music’s Free Tier Is More Advertising Play Than Spotify Killer, Analysts Say

    When news began to spread last week that Amazon Music’s long-anticipated free streaming tier was imminent, headlines emerged about its threat to Spotify and Apple Music, with some stories saying that Spotify’s stock price dropped in response to the news. But not only was today’s launch of the free tier basically a soft one — [...]

  • Nicki MinajCFDA Vogue Fashion Fund Dinner,

    Nicki Minaj Parts Ways With Longtime Managers (EXCLUSIVE)

    Nicki Minaj has parted ways with Gee Roberson and Cortez Bryant and Blueprint/ Maverick Management, a source close to the situation confirms to Variety. She had worked with the pair for the majority of her career. The source says the decision was mutual and amicable, and there was no specific reason for the split, adding [...]

More From Our Brands

Access exclusive content