Comcast Goes Public on Plan for Fox Bid

Comcast Corp. is escalating its threat to disrupt Walt Disney Co.’s megadeal to buy the bulk of 21st Century Fox Inc.’s assets, a potential move that could reshape the power structure in the entertainment industry, reports The Wall Street Journal.

Comcast said on Wednesday it is in advanced stages of preparing a cash offer that would top Disney’s all-stock, $52.4 billion deal for Fox’s entertainment businesses. One major Fox shareholder is also urging the company to engage with Comcast, adding pressure as the cable giant gets ready to appeal directly to Fox shareholders.

Fox’s board last year rejected Comcast’s original bid, even though it exceeded Disney’s offer, because directors believed it was more risky with regulators and would require the sale of too many valuable assets to win approval.

Since then, Comcast has been laying the groundwork to make a case for why it should be the one to acquire Fox’s assets, setting the stage for a potential bidding war that would pit Comcast Chief Executive Brian Roberts against Disney CEO Robert Iger for businesses long controlled by media titan Rupert Murdoch.

Iger, Murdoch, Roberts

The Fox assets—which range from international pay-TV distribution to cable networks and a stake in streaming giant Hulu—are some of the most-prized entertainment properties likely to come on the market for some time, and the Murdoch family’s willingness to sell these assets has come as a surprise to many in the media industry.

The rare acquisition opportunity, combined with the need to significantly expand overseas and acquire new distribution and content, is adding a dimension of urgency for both Comcast and Disney.

Comcast is dealing with a saturated pay-TV market at home and could find new growth with Fox’s international assets in countries where the penetration of cable services is lower.

For Disney, a Fox tie-up would immediately give it an advantage in its fight with Netflix Inc. by bolstering the movies and shows available for its planned streaming service and giving it majority ownership in Hulu.

According to philly.com, Comcast disclosed its game plan Wednesday because it believed that the Rupert Murdoch-controlled 21st Century Fox was rushing to hold a special shareholders meeting to seek approval for the Disney offer. Disney has offered to buy the Fox assets for Disney stock and Comcast has been telling investors that its cash deal would be “superior” for Fox shareholders — or a sure thing with hard cash vs. Disney stock that could sink in value.

Comcast and Disney could face harsh scrutiny from Justice Department antitrust lawyers because they already own substantial entertainment assets. Comcast owns the NBCUniversal entertainment conglomerate, two movie studios, the NBC television network, and cable channels. Disney owns ESPN sports-media juggernaut, movie studios, a huge film library, and the ABC broadcast-TV network. Disney also owns the rights to the Star Wars movie franchise after buying Lucasfilm in October 2012.