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Disney and Fox Shareholders Approve Merger. Still Needs Government Approval

At a special meetings early this morning, Disney and 21st Century Fox shareholders approved the merger of the two companies. Disney said the 99% of shareholders voted for approval while Fox said a “majority” approved it. The final tally would be in an SEC filing at the end of the day. The whole process took about 10 minutes. Few spoke when given an opportunity.

The $71.3 billion deal has to pass through regulatory hoops. Most of the consequential reviews have already been completed when the Department of Justice reached a settlement with Disney.

Disney will be required to divest twenty-two regional sports networks in order to complete the acquisition. The Justice Department Antitrust Division filed a civil antitrust lawsuit in June to block the acquisition. The concern is over higher prices over subscription prices.

While concerns have been raised over cable prices, it doesn’t seem that concerns are being raised over movie ticket prices where Disney will control around 60% of the market and has already brought pressure on theater owners as well as reporters. Consumers will likely suffer from the merger and decrease in competition. The company will also own a majority of Hulu. It is expected the merger will cost 5,000 to 10,000 jobs.

Fox shareholders will get $38 per share in either cash or shares of New Disney, a new holding company that will become the parent of both Disney and Fox. Disney expects to pay about $35.7 billion in cash and 343 million new Disney shares to 21st Century Fox stockholders. Fox stockholders will own about 17-20% of New Disney on a pro forma basis.

Disney Ups Their Fox Bid to $71 Billion Throwing the Ball in to Comcast’s Court for a Counter Offer

The battle for 21st Century Fox continues as Disney has upped their offer for the company to $71.3 billion. The $38-a-share is $10 a share higher than Disney‘s previous and $3 above Comcast‘s bid. There’s also more flexibility and other enhancements than the Comcast offer.

Disney’s offer gives Fox shareholders the option to take their payment in cash or stock, up to a 50-50 level. The previous Disney offer was an all-stock deal. Comcast had made a cash offer. Disney will also take on $13.8 billion of Fox’s debt putting the total transaction about $85 billion.

There’s also a fight over Sky, a British pay-TV company, which Fox is attempting to acquire but Comcast came in with a higher big.

Comcast had offered $65 billion for Fox, as well as the Sky deal. The company has high debt which may make it difficult for them to counter the latest offer.

The deal covers a lot, but not all of Fox’s assets. Included are Fox’s movie and TV studios, television networks like FX, multichannel providers like Star India and Sky Plc, a 30% stake in Hulu, and properties like the X-Men and Fantastic Four.

AT&T and Time Warner are currently merging which is making deals such as this a higher priority. Experts expect numerous deals over the next few years as media consolidates even more.

Comcast Bids $65 Billion for 21st Century Fox

While many are acting like it’s a done deal, Disney may not be reuniting the X-Men and Fantastic Four with the Avengers.

Comcast has formalized a $65 billion all-cash bid for most of 21st Century Fox. This is higher than Disney’s $52.4 billion deal revealed in December for the same assets.

This sets the stage for a bidding war that may be as entertaining as any summer blockbuster. Both companies want Fox to boost their influence in industries undergoing massive change.

Purchasing Fox would allow Comcast to deliver even more to consumers and create interesting bundles for their internet subscribers as an example. They already own NBC.

Comcast was in talks to buy Fox in 2017 but investors weren’t sure that such a deal would be approved by government regulation. After the recent court ruling giving the go ahead to the AT&T/Time Warner deal that is no longer a concern.

The deal now goes to Fox’s board who will need to determine which offer is better for the company. If they go with Comcast, Disney would have five days to counter.

Not So Fast Fox and Disney. Comcast to Swoop In With an Offer.

While geekdom continues to act like the deal between Fox and Disney is done, it’s far from over. A vote from shareholders as well as regulatory approval still needs to happen. But, before even that, Comcast is stepping in for a bid of their own.

After weeks of rumors, Comcast said today they are in “advance stages” of an all-cash offer for the entertainment assets of 21st Century Fox. The Comcast offer would be at a “premium” conpared to the Disney offer though specifics haven’t been announced.

Comcast had previously made an offer to Fox that topped Disney last year but that was rejected by the 21st Century Fox’s board. The board felt the Disney deal had better synergy and they worried abou regulatory risks.

This is just one of the many battles and dramas playing out including AT&T’s fight with U.S. regulators over their deal to acquire Time Warner. Comcast has launched an offer for Sky which would top 21st Century Fox’s takeover of the U.K. satellite TV operator, and CBS and Viacom are fighting over a plan to merge the two.

The Comcast and Disney plans would be to take over FX Networks, National Geographic, 300 international channels, 22 regional sports networks, the 20th Century Fox film and TV studio, Fox’s 30% stake in Hulu, 50% share of Edemol Shine Group, the Star India satellite service, and Fox’s 39% interest in Euro satellite broadcaster Sky. Both Comcast and Disney already have a percent of Hulu. This acquisition would give whomever a majority of the control of that service.

The New Fox that emerged would include the Fox Broadcasting Company network and its TV station group, Fox News Channel, Fox Business Network, and Fox Sports operations.

Disney Buys Fox Assets for $52.4 Billion in Blow to Consumers

There’s irony that on the day the FCC is voting to kill Net Neutrality, hurting consumers and putting more power into internet providers and especially those that are content providers, Disney and 20th Century Fox have announced a $52.4 billion all-stock deal.

  • The deal values the 21st Century Fox assets in the transaction at $66.1 billion. That includes $13.7 billion in 21st Century Fox debt, or $28 a share. The enterprise value of the deal is $69 billion.
  • Disney chairman-CEO Bob Iger has extended his contract with the company through the end of 2021.
  • 21st Century Fox will spinoff Fox Broadcasting Co., Fox Sports, Fox News, Fox Television Stations and a handful of other assets into a new company. The 20th Century Fox lot in Century City will also remain with the spinoff Fox company.
  • 21st Century Fox will continue to pursue its acquisition of the remaining 61% stake in Euro satcaster Sky that it does not already own with the intention of Disney taking it over when the Disney-Fox transaction is completed. Disney gets Fox’s current 39% interest in Sky no matter what.
  • Disney expects to save $2 billion from combining Disney and Fox’s overlapping businesses within two years of the deal’s closing.
  • Disney will launch direct-to-consumer streaming with sports and entertainment services launching in 2018 or 2019
  • Disney gets Fox’s 30% stake in Hulu bringing their total to 60%, a majority. It is expected they will try to buy the other stakes.
  • Disney will gain back the rights to the X-Men, Fantastic Four, Deadpool, Avatar, the Simpsons, Planet of the Apes, Alien, as well as Star Wars: A New Hope.
  • Disney also gains numerous tv channels like FX and National Geographic.
  • Disney will have about 40% of the movie market.

20th Century Fox also invested in comic publisher BOOM! Studios earlier this year giving the company a minor stake in the comic publisher. This also includes a first look deal. We’ve asked BOOM! how this deal might impact them.

While fans are cheering on the idea that the X-Men and Fantastic Four can now play with the Avengers, 21st Century Fox chairman Rupert Murdoch made it clear who really wins, shareholders:

We are extremely proud of all that we have built at 21st Century Fox, and I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry. Furthermore, I’m convinced that this combination, under Bob Iger’s leadership, will be one of the greatest companies in the world. I’m grateful and encouraged that Bob has agreed to stay on, and is committed to succeeding with a combined team that is second to none.

That value will be built off of the backs of consumers and the employees who will lose their jobs due to this merger. While geek sites are praising the deal and its potential, they overlook the disaster in a making for themselves and consumers.

In the early 1980s US media was held by just 50 corporations — and the number has dropped to only a handful since then. Reported in 2012, Business Insider just 6 corporations control 90% of the media in America. Things have shifted a bit since then, but reality is just a few corporations control the vast majority of the movies, television, newspapers, and radio you listen to and consume. Disney’s purchase of Fox’s movie and television production allows them to flex even more weight and in a way that harms consumers, creators, and theater owners.

Here’s just a few ways things can go off the rail:

  • Disney has “launched” their own movie service, “Movies Anywhere” after they pulled out of their deal with Netflix. Along with Disney, Warner Bros., Universal, Sony Pictures, and Twentieth Century Fox have all signed on to the service. While there’s some good in how the service works, having the studio controlling a major distribution channel is rife for abuse, especially when they own Fox too. They could pull all that content from Netflix and other services making Movies Anywhere the only online digital app to view their films legally. Add in the power of the data gained from consumers using their own app and you have a scenario where others can be muscled out or muscled to take part decreasing consumer choice and increasing costs.
  • Disney and Fox, as well as Comcast Corp and Time Warner Inc, own stakes in Hulu. With this deal Disney now owns 60% of Hulu, a controlling stake. Expect Disney to attempt to purchase the other 40% from Comcast (which owns 30%) and Time Warner (which owns 10%). Hulu will either be downgrading as to not compete with Disney’s other direct to consumer distribution plans or things will be folded into this platform. However, when it comes time for renegotiation of content, Disney will absolutely put the pressure on content providers to get a better deal resulting in some to pull their content and/or signing exclusive deals. The digital content wars have begun.
  • Speaking of increasing costs, Disney has been muscling theaters to pay more for their films. Disney has recently had two recent spats with theaters over Guardians of the Galaxy Vol. 2 and Star Wars: The Last Jedi where they demanded greater cuts to show their films and greater demands as to what screens the films will be seen on. Movie consolidation would allow Disney to continue this trend either causing ticket prices to increase, theaters to stop showing their films, or theaters even going out of business. Again, a bad deal for consumers.
  • Disney has revoked access for reporters over coverage they didn’t like (this negative piece could get us blacklisted for all I know). Disney has banned The Los Angeles Times from all advance screenings of their movies as a vindictive response to an investigative piece it published on Disney’s relationship to the city of Anaheim. Other sites joined in with the Los Angeles Times in solidarity such as the AV Club and Washington Post. It was that pressure that caused Disney to relent, but, it shows they are willing to stifle the press over negative coverage. Is a company who has shown blatant attempts to manipulate the press for positive coverage owning more ways to reach consumers a good thing? Imagine that extending further to any article Disney deems as negative freezing them out and only providing access to those who will only provide positive coverage. This is a chilling effect for entertainment coverage and free press. This consolidation would give Disney somewhere between 30-40% of the movie market share.

There’s also the jobs lost from the merger, Disney now owning Fox’s development studios and how that might impact creation of entertainment, and the unwillingness of Disney competing with itself in theaters and thus decreasing overall film output.

The United States has a long history of fighting corporate consolidation and monopolies recognizing that competition is a good thing and corporate control is rife for abuse. If we ever needed regulators to step in and save consumers, it’s now. It is expected for the regulatory review to take as long as 18 months before the deal can be fully approved.

If It’s the X-Men in the MCU That You’re Focused On, Your Priorities are Skewed

Today, the entertainment industry was chattering away as the news broke that 21st Century Fox and Disney were in negotiations for Disney to purchase some of Fox’s business. The television properties would remain but it’s believed Fox’s movie business and tv production would head to Disney if the deal went through according to CNBC, though Bloomberg has reported the deal is dead right now.

The news spread across the geek-o-sphere with sites excited about seeing the X-Men, Deadpool, and Fantastic Four back at Marvel and part of the Marvel Cinematic Universe (Marvel is owned by Disney). They were excited that Star Wars: A New Hope would be with Lucasfilm which meant original cuts and more!

Beyond the fact that none of this is happening any time soon, what these sites overlooked in their naivete is that Disney gobbling up some of Fox’s entertainment business further consolidates movie and television production and increasing Disney’s power and control. And currently, Disney is being pretty evil.

In the early 1980s US media was held by just 50 corporations — and the number has dropped to only a handful since then. Reported in 2012, Business Insider just 6 corporations control 90% of the media in America. Things have shifted a bit since then, but reality is just a few corporations control the vast majority of the movies, television, newspapers, and radio you listen to and consume. Disney’s purchase of Fox’s movie and television production would allow them to flex even more weight and in a way that harms consumers.

Here’s just a few ways things can go off the rail:

  • Disney has “launched” their own movie service, “Movies Anywhere” after they pulled out of their deal with Netflix. Along with Disney, Warner Bros., Universal, Sony Pictures, and Twentieth Century Fox have all signed on to the service. While there’s some good in how the service works, having the studio controlling a major distribution channel is rife for abuse, especially if they were to own Fox too. They could pull all that content from Netflix and other services making Movies Anywhere the only online digital app to view their films legally. Add in the power of the data gained from consumers using their own app and you have a scenario where others can be muscled out or muscled to take part decreasing consumer choice and increasing costs.

Disney and Fox, as well as Comcast Corp and Time Warner Inc, own stakes in Hulu. And while they have signed a deal with that service, there is no reason that couldn’t end if Disney were to control Fox or a deal pressed against Hulu which the service couldn’t accept and survive.

  • Speaking of increasing costs, Disney has been muscling theaters to pay more for their films. Disney has recently had two recent spats with theaters over Guardians of the Galaxy Vol. 2 and Star Wars: The Last Jedi where they demanded greater cuts to show their films and greater demands as to what screens the films will be seen on. Movie consolidation would allow Disney to continue this trend either causing ticket prices to increase, theaters to stop showing their films, or theaters even going out of business. Again, a bad deal for consumers.
  • Disney is currently pulling access for reporters over coverage they didn’t like (this negative piece could get us blacklisted for all I know). Disney has banned The Los Angeles Times from all advance screenings of their movies as a vindictive response to an investigative piece it published on Disney’s relationship to the city of Anaheim. Other sites have joined in with the Los Angeles Times in solidarity such as the AV Club and Washington Post. Imagine that extending further to any article Disney deems as negative freezing them out and only providing access to those who will only provide positive coverage. This is a chilling effect for entertainment coverage and free press. This consolidation would give Disney somewhere between 30-40% of the movie market share.

So before you celebrate how the X-Men might fight the Avengers, stop to think how if that happens you could have less choices in how you see that film and pay more to do so.

Could Fox Buy DC Comics?

21stCenturyFox_PentagramThere’s a lot of maneuvering the the mega corporation business world, as Rupert Murdoch‘s 21st Century Fox is looking to buy Time Warner. Time Warner owns DC Comics, so, it’s possible Fox might soon own some of the most iconic characters out there.

As reported by The Verge, Fox made an $80 billion bid for Time Warner, and that bid was declined. The New York Times is reporting that Murdoch is “determined” to push ahead with the takeover, and not likely to walk away. CNBC confirmed the offer and rebuttal. CNBC also has reported that the two company’s CEOs met in June to discuss a potential deal.

If this goes through, bets as to how quickly Superman returns to fighting for “truth, justice, and the AMERICAN way”?