Tuesday, June 5, 2018

U-K Okay Sets Up, Disney-Comcast Showdown

Britain’s culture secretary said on Tuesday that 21st Century Fox should be allowed to bid for control of the satellite broadcaster Sky, setting up a potential bidding war with Comcast for a jewel of Europe’s media industry.

According to The NYTimes, the decision by the culture secretary, Matt Hancock, ends months of uncertainty over whether the British government would block Rupert Murdoch’s efforts to buy the 61 percent of Sky that his company does not already own. But in a nod to concern over Mr. Murdoch winning too much control of Britain’s media landscape, Hancock also required the sale of the broadcaster’s 24-hour news channel, Sky News.

The decision frees Fox to sweeten its bid for control of Sky in the face of competition from Comcast. Murdoch’s offer values Sky at about 18.5 billion pounds, or about $25 billion; Comcast’s values the broadcaster at $29 billion.

Yet a fight for Sky is in some ways a proxy war for a bigger battle: one between Comcast and Walt Disney over control of a majority of  Murdoch’s media empire.

Disney has already struck a $52.4 billion deal to buy most of Fox, including its 39 percent stake in Sky. But Comcast is weighing whether to make a counterbid for those same assets, which include the 20th Century Fox movie studio and the Star broadcaster in India.

Both Disney and Comcast want to expand their holdings at a time when bigger is better for media companies. Digital giants like Netflix and Amazon are gaining power as consumers increasingly watch movies and television online. Traditional content providers have decided that the only solution is more deal-making: AT&T has offered $85.4 billion for Time Warner, and companies are paying billions for exclusive sports broadcast rights.

Sky would play an important role in both Disney’s and Comcast’s future-proofing efforts. The London-based broadcaster has 23 million customers across five countries, and it owns valuable broadcasting rights to English Premier League games and other sporting events. It also has a streaming service, NOW TV.

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