Disney Ups The Ante

(Recounting part of Disney's "cagematch" with Comcast over Fox 21st C.)


Disney Ups The Ante In Its Streamland Cagematch

And just like that Disney has raised its price for 21st Century Fox, topping Comcast’s 65 billion all cash offer with a 71.3 Billion offer, offering to pay $38 per Fox share with cash and stock, far above its 51.4 billion offer from December 2017. Another round in the Old Media cagematch with Comcast continues.

From the Disney press release regarding this latest offer:

“Under the amended agreement, 21st Century Fox shareholders may elect to receive, for each share of 21st Century Fox common stock, $38 in either cash or shares of Disney common stock (subject to adjustment for certain tax liabilities as described in the original acquisition announcement). The overall mix of consideration paid to 21st Century Fox shareholders will be approximately 50% cash and 50% stock.”

And this to my thinking, from that same release is the true objective, the future:

“The acquisition will significantly increase Disney’s international footprint and expand the content and distribution for its direct-to-consumer (DTC) offerings, which include ESPN+ for sports fans; a Disney-branded streaming video-on-demand service launching in late 2019 that will feature Disney, Pixar, Marvel and Star Wars films along with a host of exclusive original content and library titles; and its ownership stake in Hulu. As a result of the acquisition, Disney will hold a controlling stake in Hulu.”

A recap chart from Variety’s June 20, 2018 coverage on the battle for Fox assets.

Variety quoted a gratified Rupert Murdoch:

““We are extremely proud of the businesses we have built at 21st Century Fox, and firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace at a dynamic time for our industry,” said Rupert Murdoch, executive chairman of 21st Century Fox. “We remain convinced that the combination of 21CF’s iconic assets, brands and franchises with Disney’s will create one of the greatest, most innovative companies in the world.””

Fox is to reschedule a July 10 meeting to a future date in light of this new offer.

An interesting side-effect of a consummated deal would include some regulatory compliant asset disposals of regional sports networks (RSNs). According to Sports Business Daily, which quotes “AwfulAnnouncing” and other sources:

POTENTIAL HOMES FOR RSNs: AWFUL ANNOUNCING’s Ken Fang wrote if Comcast or Disney decides to sell the RSNs, “perhaps the loser in the process could buy them, but that might be too simple of an answer.” CBS recently began its own OTT offering in CBS Sports HQ, but it “does not have live sports and with the network embroiled in its own corporate battle [with Viacom], it might not be in the market to make a large purchase that could reach into the billions.” Turner Sports, whose parent firm Time Warner was just acquired by AT&T, “could enter the regional sports network fray and add them to an already expansive list of properties.” One “dark horse” could be Discovery. Fang: “If Discovery wants to make a sports foothold in the U.S., what better way than to buy the Fox Sports Nets?” There is also the “potential of tech companies such as Amazon, Facebook, or Google stepping in” (AWFULANNOUNCING.com, 6/18).”

This is all about the following emerging leaders in what I keep referring to as “Streamland”, whose shares continue to ascend. At some point if the bidding continues, perhaps the “real” deal ahead is a merger with the one of them. Just a thought. Here’s a great relevant chart from Charlie Bilello of Pension Partners of FANG and “new media”, which he posted today:

And this subject has been covered in prior posts:

Streamland Vs. The Magic Kingdom ($NFLX $DIS)
I. How A $40 Late Fee Leads Me To “Halt & Catch Fire”:medium.com

Extract Monday — Log On, Turn Off, Download: On Media & Streamland
This post’s title is a play on Timothy Leary’s “Turn on, tune in, drop out”, which it turns out was credited by Leary…medium.com

Transform Tuesday — The Streamland “Cagematch” Escalates: On AT&T / TimeWarner
It looks like with roughly a week to spare, the AT&T and Time Warner $80+ B USD merger may proceed, after an 18+ month…medium.com

Load Wednesday - Streamland Cagematch Goes Old School
It's as if the gloves came off for deal-makers among Old Media within moments of a favorable ruling on the AT&T Time…big-stack.com

The cagematch continues, to the victor belongs not the spoils but a date with both destiny and New Media.


Originally published at big-stack.com on June 21, 2018.