The Rebooted "Keep Hope Alive" (that the rights can revert back to Marvel) Thread - - - - - - - - - - Part 19

[Willie Lumpkin]

https://www.bloomberg.com/news/arti...y-concerns-could-delay-derail-any-comcast-bid

 

[ImSGirl95]

https://www.bloomberg.com/news/arti...y-concerns-could-delay-derail-any-comcast-bid

Ok, for Comcast is clear. But does this mean bad or good news for Disney?

 

[Zarex]

Ok, for Comcast is clear. But does this mean bad or good news for Disney?

It's good in terms of Disney's bid being accepted. Comcast is going to have to come back in with a much higher offer than Iger's to even be considered.

 

[Dark Raven]

https://www.bloomberg.com/news/arti...y-concerns-could-delay-derail-any-comcast-bid

Well maybe Fox will try to get rid of Comcast, knowing that it will cause them inevitable delay and difficulties with regulatory approval. However, n a moment of insanity and because things get awkward, they'll accept Comcast's bid at the last second anyway, just like Chandler couldn't break up with Rachel's boss in Friends:

[YT]IPU2hhchU9w[/YT]

 

[Willie Lumpkin]

Ok, for Comcast is clear. But does this mean bad or good news for Disney?

Fox's lawyers are saying Comcast is less likely to go through than Disney. That's good for Disney and us.

It doesn't necessarily mean Comcast will give up, but it's another straw added to the camel's back.

"While a potential Disney transaction was likely to receive required regulatory approvals and ultimately be consummated, a strategic transaction with Comcast continued to carry higher regulatory risk," according to registration statement filed with the U.S. Securities and Exchange Commission. That could lead "to the possibility of significant delay in the receipt of merger consideration as well as the risk of an inability to consummate the transactions."

 

[Orba]

Yeah, Comcast are going to have to make a massive offer, do the Fox shareholders really want to turn down an offer they know will be approved in order to accept a higher offer that could be blocked? And I can't see how Comcast could come up with an offer that doesn't require them to borrow far more than Comcast's own shareholders, and the market, would be happy with.

 

[Shinobi Shaw]

Disney is not playing with this acquisition. They did their homework, in constant communication with FOX and their lawyers, they didn't go into this blindly.

For Iger to ask for loans from five major banks, they're gonna get something out of this damn deal. Comcast or no Comcast.

 

[Willie Lumpkin]

Yeah, Comcast are going to have to make a massive offer, do the Fox shareholders really want to turn down an offer they know will be approved in order to accept a higher offer that could be blocked? And I can't see how Comcast could come up with an offer that doesn't require them to borrow far more than Comcast's own shareholders, and the market, would be happy with.

I would say that Comcast would probably have to pay an approximate 20% "risk premium". That means Comcast would have to go to approximately $85 billion plus $1.5 billion break-up fee or $86-$87 billion just to match Disney's current bid (and still not be a clear winner at that point).

And at that point, Fox's $15 billion debt would push Comcast to over $100 billion total debt.

 

[Orba]

With egos playing a factor I can't help wondering about Roberts, does he want to make a big offer for it to be turned down or would he save more face if he was to bow out earlier. Going all in only to be rejected would be a bit of a slap in the face.

 

[Orba]

I would say that Comcast would probably have to pay an approximate 20% "risk premium". That means Comcast would have to go to approximately $85 billion plus $1.5 billion break-up fee or $86-$87 billion just to match Disney's current bid (and still not be a clear winner at that point).

And at that point, Fox's $15 billion debt would push Comcast to over $100 billion total debt.

Their $65 billion offer would have placed them about $10 billion behind AT&T/Warner in level of debt, going to $100 billion offer...

 

[Big Bang]

I would say that Comcast would probably have to pay an approximate 20% "risk premium". That means Comcast would have to go to approximately $85 billion plus $1.5 billion break-up fee or $86-$87 billion just to match Disney's current bid (and still not be a clear winner at that point).

And at that point, Fox's $15 billion debt would push Comcast to over $100 billion total debt.

That also doesn't include the $30+ Billion they are trying to spend on Sky in the UK. I think if Sky backs Comcast's bid, we aren't going to see either Fox or Disney try to outbid them. The numbers are just against Comcast.

 

[Kahran Ramsus]

100B (~$54/share) + Fox debt + Disney break up fee + Sky 31B (which would HAVE to be higher due to aforementioned Fox bid) = ~150B in additional debt on top of the current 66B debt.

Not only Disney immediately walk away as they have a fiduciary duty to their shareholders, but also Comcast shareholders would have to consider some type of legal action against the board being extremely careless. Especially since shareholders would not vote on this.

If that were to happen, could angry Comcast shareholders potentially tie up the deal in the courts for some time (or derail it outright if the courts side in their favor)?

 

[MasterCat]

Who will own a controlling interest in Sky when Disney acquires 21st Century Fox? Comcast or Disney?
It still puzzles me that Iger called this "the crown jewel", not the Fox content library or Star.

 

[Big Bang]

Who will own a controlling interest in Sky when Disney acquires 21st Century Fox? Comcast or Disney?
It still puzzles me that Iger called this "the crown jewel", not the Fox content library or Star.

Until the remaining 61% is sold, Sky themselves IIRC. Fox's share is only 39%

 

[Zarex]

So assuming the deal goes through, what does Iger sell off to reduce the debt burden the higher bid? Here's what we know so far......

Sky - Will Roberts be outbid for the 61% available if he loses the rest of Fox? Unlikely! Iger could hang on to the 39%, but will probably sell it off to Kabletown.

RSNs - I thought this would be a big part of Disney's efforts to bolster ESPN. But the Mouse is willing to divest. https://www.recode.net/2018/6/13/17461852/disney-fox-comcast-rsn-divest-regulator

Endemol Shine - 50% ownership stake is on the block! https://deadline.com/2018/06/endemol-shine-group-calls-in-banks-to-explore-sale-1202414039/

Hulu - Comcast offered to spin it off, but the regulatory burden shouldn't fall on Disney because of their lack of distribution assets. Will almost definitely lose NBC Universal content. https://deadline.com/2018/06/comcas...n-hulu-to-win-regulatory-approval-1202411002/

We will see consolidation between the TV and film production businesses. Does Iger strip mine the Fox units of their most valuable franchises and sell off the rest? Does Fox 2000 pictures go the way of Hollywood Pictures? Does Iger find a buyer for FX and FXX? This should be awfully interesting.

 

[Big Bang]

With egos playing a factor I can't help wondering about Roberts, does he want to make a big offer for it to be turned down or would he save more face if he was to bow out earlier. Going all in only to be rejected would be a bit of a slap in the face.

I'm leaning more toward Roberts taking any further offers straight to Fox shareholders, going hostile in the process.

 

[Big Bang]

Sky - Will Roberts be outbid for the 61% available if he loses the rest of Fox? Unlikely! Iger could hang on to the 39%, but will probably sell it off to Kabletown.

Agreed. I think Sky is going to be Comcast's for the taking.

Hulu - Comcast offered to spin it off, but the regulatory burden shouldn't fall on Disney because of their lack of distribution assets. Will almost definitely lose NBC Universal content. https://deadline.com/2018/06/comcas...n-hulu-to-win-regulatory-approval-1202411002/

I think Warner's 10% is going to come up for sale soon too. AT&T now has 2x of their own streaming products, and I don't doubt they would love to concentrate all of Warner's media onto those platforms. Comcast seems to be fostering a closer relationship with Netflix, who is happy to buy content from them. I'm expect for those two to pull out their content at some point regardless of what happens with Hulu.

We will see consolidation between the TV and film production businesses. Does Iger strip mine the Fox units of their most valuable franchises and sell off the rest? Does Fox 2000 pictures go the way of Hollywood Pictures? Does Iger find a buyer for FX and FXX? This should be awfully interesting.

Some consolidation perhaps, for the moment things won't be collapsed in a dramatic fashion. I could see some consolidation of FX and FXX consolidation, along with the collapse of its streaming service into Disney's product.

The major question for me is whether the studios will continue to make and market product for traditional television, or be focused on putting its content on the OTT product. For now I think the big immediate changes will involve the full consolidation of Marvel films into Marvel Studios.

 

[Orba]

I'm leaning more toward Roberts taking any further offers straight to Fox shareholders, going hostile in the process.

But he will need bring something big to the table if he goes to the shareholders directly, he needs to offer them enough that they are willing to turn down a guaranteed deal right now and instead go for a possible deal in at least 6 months, a year or more if the US Government tries to block the deal. If Murdoch is backing the Disney bid then that is about 17% lost right there, then there are plenty of other shareholders who will play it safe and take the Disney deal. It will take a lot of convincing or an awful lot of money to make the majority take the risk.



And with these trade wars building would people prefer to get their money/stock sooner rather than later?

 

[Willie Lumpkin]

If that were to happen, could angry Comcast shareholders potentially tie up the deal in the courts for some time (or derail it outright if the courts side in their favor)?

I believe shareholders would get a direct vote, so it probably wouldn't be tied up in courts, but an overly large bid could very well be rejected by Comcast shareholders.

So that's a very good point. The Fox board and shareholders should consider the likelihood of shareholder approval along with regulatory approval.

A ridiculously high bid has a good possibility of being rejected by Comcast shareholders and could leave Fox holding their d***.

 

[Zarex]

The major question for me is whether the studios will continue to make and market product for traditional television, or be focused on putting its content on the OTT product. For now I think the big immediate changes will involve the full consolidation of Marvel films into Marvel Studios.

It's a tough situation for Disney, Comcast, AT&T and National Amusements, who have billions invested in networks and traditional cable packages. They can't decide to go full streaming all the time like Netflix without crashing the value. They'll continue to dip their toes without full OTT commitment, like Disney is doing with ESPN Plus, but they are at a disadvantage to pure streamers.

Speaking of which, I'm curious as to what Iger's streaming strategy will be going forward. Are they going to use the Hulu/Disneyflix/ESPN+ triumverate as their Netflix killer? One of the big appeals of Netflix is that it is a one stop shop with a low monthly fee. Marketing multiple services is going to look an awful lot like the cable packages folks are moving away from.

 

[Kuwolski]

Why can't they just throw it under one label? That could easily compete with Netflix in the long run.

Netfilix offers entertainment of all kinds, Disney streaming offers that plus sports of all kinds, with the biggest sports and entertainment brands to boot.

 

[MasterCat]

Speaking of which, I'm curious as to what Iger's streaming strategy will be going forward. Are they going to use the Hulu/Disneyflix/ESPN+ triumverate as their Netflix killer? One of the big appeals of Netflix is that it is a one stop shop with a low monthly fee. Marketing multiple services is going to look an awful lot like the cable packages folks are moving away from.

This. I've been hearing bad things about the Disney streaming service, like that it will launch with only five TV shows and five original movies. Unless they load it up with old movies, Marvel cartoons, Clone Wars, etc... who's gonna pay for that instead of just having one Netflix or Amazon Prime bill?

 

[Zarex]

Why can't they just throw it under one label? That could easily compete with Netflix in the long run.

Netfilix offers entertainment of all kinds, Disney streaming offers that plus sports of all kinds, with the biggest sports and entertainment brands to boot.

Disney is an enormously popular brand, and I have no doubt a streaming service rife with all-ages branded Disney, Pixar, Star Wars and Marvel content would be extremely successful. But they can't include adult oriented content on Disneyflix (or Disneylife) without tarnishing the brand.

You can move the Hulu brand to the forefront and have Disneyflix and ESPN+ offerings under that banner. But that isn't taking advantage of your biggest selling point and it is providing multiple options for folks who, it has been shown, prefer one. Too many options has been one of the big problems with Hulu in comparison to Netflix and could be an issue for Disney's multiple streaming services going forward.

 

[ADollarADay]

Agreed. I think Sky is going to be Comcast's for the taking.

I think Warner's 10% is going to come up for sale soon too. AT&T now has 2x of their own streaming products, and I don't doubt they would love to concentrate all of Warner's media onto those platforms. Comcast seems to be fostering a closer relationship with Netflix, who is happy to buy content from them. I'm expect for those two to pull out their content at some point regardless of what happens with Hulu.

How much money Disney would get for the 39% of Sky is also a valid question. At 31B (which will probably go up if Fox closes at 71B), the 39% is worth 12B. Let's go with that number.

An April analysis says Hulu is worth 8.7B, which is up from its 5.8B 2016 valuation when Time Warner bought a 10% stake in the company.

https://www.bloomberg.com/news/arti...7-billion-value-on-hulu-is-dwarfed-by-netflix

https://variety.com/2016/digital/news/time-warner-hulu-investment-1201829514/

Let's be conservative in our analysis:
Assets that would be owned by Disney that Comcast wants:

Sky 39% = 12B
Fox's Dreamwork Animation VOD distribution rights = 0

Assets that would are owned by Comcast that Disney wants:

30% of Hulu = 30% of 9B = 3.3B
Marvel Orlando theme park rights, Spider-man Japan theme park rights and outstanding Hulk and Namor movie rights = 1B

Even in this unrealistic scenario, Comcast would still have to pay Disney ~7.7B to get the rest of Sky.

 

[Zarex]

This. I've been hearing bad things about the Disney streaming service, like that it will launch with only five TV shows and five original movies. Unless they load it up with old movies, Marvel cartoons, Clone Wars, etc... who's gonna pay for that instead of just having one Netflix or Amazon Prime bill?

I'm thinking it will be LOADED with Star Wars, MCU, Pixar and Disney animated and live action movies. Also classic cartoons, Disney Channel shows, Pixar shorts, Marvel cartoons, Star Wars cartoons, etc. Parents are going to pay for it.