Comcast could spend $90B in cash to compete with Disney and Netflix

Comcast could spend $90B in cash to compete with Disney and Netflix

Disney has included a breakup penalty worked into the offer, should this bid not pass the regulators, and Comcast has allegedly worked this into their terms as well.

Daniel Ives, head of technology research at GBH Insights, said that a Comcast bid would be "game changing" and, if successful, would seriously harm Disney's plan to build and provide content for a rival streaming service to Netflix.

After the Walt Disney Co. and Rupert Murdoch's 21st Century Fox seemed to agree on a $52.4 billion deal in December 2017 that would give Disney the lion's share of the movie and television assets from the Fox empire, a challenge from Comcast has slowly but surely cast a shadow over the deal, making the potential mega-merger less certain.

Comcast put in a $60bn bid for Fox past year, a 16% premium to Disney's offer, but Rupert Murdoch rejected it, citing regulatory concerns and share structure.

Comcast said Wednesday that its in the "advanced stages" of preparing its bid.

Joseph added that Comcast's offer is expected to be at a financial premium to Disney's, and as such "Fox is in a good position either ways".

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We have recently reported on the rumors of Comcast coming back in, and the fact that Disney could be prepared to let go of Sky TV in order to make sure they get their hands on those IP's. The company is close to getting United Kingdom government approval on its $31 billion bid to buy the British broadcaster. The group announced last week that Lachlan Murdoch would assume the role of chairman and chief executive at the "new" Fox, which would be tightly focused around the Fox News Channel and sports cable channels.

Comcast may have a tough time winning over Fox's largest shareholder, Murdoch, however. A Comcast deal for Fox, which controls 39% of Sky, would complete well after a deal for Sky.

The Fox and Sky deals would transform Comcast into a global entertainment giant that could compete with Netflix and break out of the US market with its melting cable-subscriber base. Separately, Comcast received preliminary consideration from a United Kingdom government official to pursue an effort to buy Sky for $31 billion. There are few other domestic or global companies with the revenues or profits that could meaningfully help Comcast grow through acquisitions, he said.

Fox has said it remained committed to its offer for Sky and is "considering its options", which means it could potentially raise its bid. Moreover, as cord cutting grows in the USA, and consumer media consumption habits change, the market will continue to see more big deals that strive to insulate players from industry disruption.

"Disney is likely to put up quite a fight", he said.

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